Combined earnings at Japan's listed companies are expected to improve after they were halved in the year to March 2002, because of poor sales, restructuring costs and investment losses, a report said Saturday.
A survey of 618 listed non-financial firms showed the total of their group pre-tax profits in the year to March plunged 50.9 percent from the preceding year to Japanese yen 5,587 billion (US$44 billion), the Nihon Keizai Shimbun reported.
Their consolidated net earnings relapsed into Japanese yen 296 billion in the red from a black-ink total of Japanese yen 436 billion, the business daily said.
The newspaper attributed the poor performance to stagnant sales, reflecting deflation and a slump in the information-technology sector, massive costs required for such restructuring measures as early retirement plans and consolidations of facilities, and appraisal losses in shareholdings.
But the earnings are expected to rebound sharply in the year to March 2003 now that "negative assets" have been disposed of, the report said.
For the year to March 2003, the pre-tax profits of the 618 firms are projected to jump 93.9 percent to Japanese yen 10.836 trillion and their net earnings are estimated to post a profit of Japanese yen 5.636 trillion.
The companies accounted for nearly 40 percent of all the publicly traded non-financial firms whose fiscal years end in March.
Even factoring in the firms that have not yet released their earnings for the year to March 2002, the possibility remains open that the total figure will show an aggregate net loss of several hundreds of billions of yen, the report said.
Of 17 manufacturing sectors covered in the survey, 13 registered consolidated net losses and declines in consolidated pre-tax profit. Seven major industrial electronics firms, including Fujitsu Ltd, had combined group net losses of just over Japanese yen 1.9 trillion, due to a slump in demand for mobile phones, personal computers and other high-tech goods.
A growing number of companies also rushed to book impairment losses on real estate holdings and valuation write-downs of shareholdings, aiming to put unrealiSed balance sheet losses behind them, the daily said.
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