Japan’s corporate sector, especially automakers, will quickly recover from the earthquake and tsunami disaster in the second half of this fiscal year, a survey reported yesterday.
The survey of 1,533 listed firms, conducted by the Nikkei Shimbum business daily, predicted that pretax profit in the six months to March next year is likely to rise 24 percent year-on-year to ¥13.96 trillion (US$173.6 billion), thanks to reconstruction demand and increased overseas sales.
AUTO SECTOR
In particular, the auto sector expects second half pretax profits to increase 56 percent year-on-year, in a clear contrast with a 93 percent decrease projected for the April to September period, it said.
The March 11 earthquake and tsunami ravaged the nation’s northeastern coast and disrupted supply chains, which is expected to drag first-half earnings of Japan Inc down by 32 percent year-on-year to ¥8.8 trillion.
Overall, companies are likely to see annual pretax profit fall by an average of 6 percent this fiscal year, the survey said.
PROFITS
Total pretax profits for the current financial year are projected to be ¥22.76 trillion, about 70 percent of a record-high pretax income posted in fiscal 2007, the Nikkei said.
That would be smaller than the fiscal year figure last year, but far better than 2009’s ¥15.53 trillion, the survey said.
Some uncertainties remain, the Nikkei survey said, as many listed firms point to a stronger yen as a factor that may weigh on exporters’ profits.
Financial institutions and start-ups were not included in the survey, while Tokyo Electric Power Co, the embattled operator of the crippled Fukushima Dai-ichi nuclear power plant, was excluded because its earnings outlook remains unclear.
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