November 8, 2022
According to SMBC Nikko Securities Inc., more than 40% of big Japanese corporations that have released their results for the first half of their fiscal year reported decreased earnings or went into the red as a result of the weaker yen and increased material costs.
The findings indicated that many businesses had trouble passing on rising energy and raw material costs to customers, which had been greatly exacerbated by the conflict in Ukraine. Further increases in import prices are a result of the yen’s decline in value relative to the US dollar and other important currencies.
According to a count made by the brokerage, 266 of the 609 companies that had declared their earnings for the six months that ended in September by Friday showed a fall in performance. 16 of 33 industry-specific categories, including the food and utilities industries, showed a similar trend.
With food producers reporting a 54.0 percent decline, the combined net profit for manufacturers increased by just 1.5 percent from the same period previous year to 6.52 trillion yen ($44 billion).
Manufacturers of transportation equipment, such as automakers, had a 16.2 percent loss in net earnings, while the construction industry experienced a 20.2 percent decline.
Contrary to the general trend, steelmakers reported a 21.3 percent increase as they passed on increased costs to customers, according to SMBC Nikko.
The land and air transportation sectors among the services sectors saw a return to profitability thanks to rising travel demand and the decline of the coronavirus pandemic. Shipping companies’ net profits doubled as economic activity increased.
Among all the sectors, utilities took the most blow. Due to rising fuel prices, power and gas firms experienced a net loss of 434.96 billion yen.
Net profit among non-manufacturers increased by 55.8 percent to 5.80 trillion yen when utility companies are excluded.
Source: KyodoNews
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