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Major firms book 1st profit drops in 3 years

Jiji PressTOKYO (Jiji Press) — Major Japanese nonfinancial companies’ combined group net profits in the business year to March fell 2.2 percent from the previous year, down for the first time in three years, a Jiji Press tally showed Monday.

The result partly reflected a slowdown in the Chinese economy. The firms expect higher profits in the year to March 2020, but uncertainty is growing due to U.S.-China trade friction.

The survey covered 927 companies listed on the Tokyo Stock Exchange’s First Section that have announced their earnings for the year to March 2019 by Monday. They account for about 70 percent of all First Section companies that close their books in March.

Major plant engineering firm Chiyoda Corp. posted a group net loss of as much as ¥214.9 billion, partly because of losses from its U.S. operations, while shipping giant Kawasaki Kisen Kaisha Ltd. logged a ¥111.1 billion loss due to a worsening of the shipping market.

Major automakers that have led the growth of the economy, including Toyota Motor Corp. and Honda Motor Co., saw lower profits, affected by appraisal losses on shareholdings or the yen’s appreciation.

Of the surveyed firms, 448 saw profit declines or incurred net losses.

For the current year, the nonfinancial firms expect a 9 percent increase in combined net profits, but forecast only a 1.4 percent rise in operating profits.

“Japanese companies are cautious about their future earnings due to difficulties forecasting their business outlooks partly on the back of the U.S.-China trade friction,” said Keiichi Ito, chief quant analyst at SMBC Nikko Securities Inc.Speech

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