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Japanese see record profits

Major Japanese firms are projected to chalk up a record total of pre-tax profits in this fiscal year as their fixed costs and appraisal losses on stockholdings have been cut, a press report said yesterday.

A survey of 1,628 listed companies showed their combined pre-tax profits were forecast to reach some ¥18.6 trillion (US$159 billion) in the year to next March, up 16.7 percent from the preceding year, the Nihon Keizai Shimbun reported.

The leading business newspaper said the margin of increase was 1.7 percentage points higher than an estimate made three months earlier, led by steel and other materials industries.

But the daily warned of a "lingering uncertainty" over the business environment in the second half of the fiscal year.

The companies surveyed did not include those in the financial sector and those listed on markets for new ventures.

Of the 32 industries surveyed, only six, including oil and communications, were projected to suffer declines in their pre-tax profits.

Manpower

Electric equipment manufacturers, trading houses and carmakers are expected to post particularly strong gains, together accounting for 49 percent of the total expected profit increase, the report said.

In the electric equipment manufacturing sector, Fujitsu Ltd is benefiting from a reduction in manpower while Matsushita Electric Industrial Co and Sharp Corp are enjoying brisk sales of digital home appliances, the report said.

Five major trading houses are expected to see a drop in their combined paper losses on stock and real estate holdings due to a resurgence in Japanese share prices.

The losses totaled more than ¥280 billion in the year to March.

Pre-tax profits by motor companies are forecast to expand some ¥300 billion from the preceding year as the top three firms -- Toyota, Nissan and Honda -- boost their shares of the North American market.

But the yen's recent appreciation against the dollar is capping their combined profit growth, which is now expected to reach only 9.5 percent in the year to next March, sharply down from the 34 percent jump a year earlier, the report said.

It added that the steel industry was benefiting from a comeback in exports to China following an end to the SARS epidemic there.
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