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Combined pretax profit of 269 firms listed on TSE up 60% in FY 2013

May 2, 2014

The combined pretax profit of 269 major companies listed on the Tokyo Stock Exchange's First Section grew over 60 percent in fiscal 2013 from the previous year, a tally by SMBC Nikko Securities Inc. showed Friday.

The brokerage partly attributed the increased profits at the nonfinancial companies to improved earnings in the manufacturing sector on the back of a weaker yen. A last-minute jump in demand ahead of the April 1 consumption tax hike also helped boost performance in a wide range of sectors.

But the Bank of Japan's Tankan survey on business confidence in March showed many businesses were cautious about capital spending in fiscal 2014 starting April due to concern about weakening demand following the consumption tax hike.

Industry analysts also predict that businesses are likely to see decreased profits in the current business year as the impact of the weaker yen wanes and consumers cut spending.

The brokerage compiled the data on 269 listed companies, or 21.7 percent of the total, which had released their earnings reports for the past fiscal year by Thursday.

According to the tally, electronic manufacturers boosted their pretax profits threefold, supported by an expansion of their overseas activities and the yen's depreciation, which boosts Japanese exporters' profits when repatriated.

Among them was Panasonic Corp., which returned to the black for the first time in three years in the reporting year.

Sales of cars and other vehicles in the United States were also brisk, pushing the combined pretax profit of the industry up over 40 percent, according to the tally.

Mazda Motor Corp.'s pretax profit rose fourfold due in part to the popularity of its fuel-efficient models, while the combined pretax profit of steelmakers also increased fourfold, the tally showed.

Nonmanufacturers also enjoyed bullish performances, with the combined profit of marine transportation companies rising by around 38 times, but air transportation companies saw profits decline due to rising fuel costs, according to the tally.

Kayoko Ota, an analyst at SMBC Nikko Securities, said, "In addition to those who enjoyed the merit of the weaker yen, companies who have promoted structural reform to enhance their competitiveness showed favorable performances."

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Source: Japan Economic Newswire

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