Quick H2 recovery expected for Japan Inc: Survey

TOKYO: Japan's corporate sector, especially automakers, will quickly recover from the quake and tsunami disaster in the second half of this fiscal year, a survey reported Sunday.

The survey of 1,533 listed firms, conducted by the Nikkei business daily, predicted pretax profit in the six months to March 2012 is likely to rise 24 percent year-on-year to 13.96 trillion yen ($173.6 billion), thanks to reconstruction demand and increased overseas sales.

The auto sector in particular 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-September period, it said.

The March 11 earthquake and tsunami ravaged the nation's north-eastern 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 yen.

Overall, the companies are likely to see annual pretax profit fall by an average of six percent this fiscal year, the survey said.

Total pretax profits for the current financial year are projected to be 22.76 trillion yen, about 70 percent of a record-high pretax income posted in fiscal 2007, the Nikkei said.

It will be smaller than the fiscal 2010 figure but far better than 2009's 15.53 trillion yen, 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 nuclear power plant, was excluded because its earnings outlook remains unclear.

Copyright AFP (Agence France-Presse), 2011