The global economic slowdown, a stronger yen and higher prices for fuel and raw materials hit the profits of major Japanese firms in the six months to September, a survey published yesterday showed.
The research by the Nikkei Shimbun on the midterm profits of 541 listed companies, collated from their earnings reports for the April to September period, showed a marked dip in profitability.
The combined earnings of the firms, in terms of group pre-tax profits, declined 21 percent year-on-year and were forecast to drop 23 percent in the full year to March, the paper said.
The survey did not include financial institutions and companies trading on markets for startups.
The slump would be the first decline in the combined performance for seven years, the Nikkei said.
Weakness in global consumption hit export-led firms particularly hard.
Electronics firms saw their profits fall 34 percent while automotive companies, including parts makers, suffered a 25 percent decline with Honda Motor Co and Nissan Motor Co hit by slow sales in North America, the Nikkei said.
Office equipment maker Ricoh Co was hit by a 30 percent tumble in profit as demand for copy machines slowed in the US and Japan. Demand in Europe also started to slip in Europe in August.
The yen, which stood at 115 to the dollar at the end of September last year, had risen to 105 a year later, also hurting exporters.
The Japanese currency surged to the ¥90 level late last month for the first time in 13 years on fears of global recession.
Sony Corp’s profit fell by about ¥20 billion (US$203 million), a decline partly attributed to the stronger yen, the Nikkei said.
In the July to September quarter, the profits of the 541 firms decreased by 30 percent from a year earlier, while the year-on-year drop was forecast to be 25 percent for the six months to March, it said.
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