Cost Hikes Lead To 41.3% Fall In Net Profit Of Japan Firms

The total net profit of listed companies in Japan dropped 41.3 percent to 4.94 trillion yen ($38.34 billion) in the January to March period from the previous quarter, reflecting the surge in raw material costs prompted by the Ukraine crisis, according to a recent tally by a securities firm, Mainichi Japan reported.

Photo Insert: Even excluding SoftBank Group Corp., an investment giant that reported a record net loss Thursday, the companies saw a 16 percent fall in combined net profit in the first quarter.

Even excluding SoftBank Group Corp., an investment giant that reported a record net loss Thursday, the companies saw a 16 percent fall in combined net profit in the first quarter, show data from SMBC Nikko Securities Inc.

In the year that ended in March, the overall net profit rose 31.8 percent to 28.53 trillion yen due to the yen's depreciation against the US dollar. A weaker yen boosts exporters' profits earned overseas when repatriated, Kyodo News also reported.

The data covered 891 listed firms or about 60 percent of the companies making up the Topix index on the Tokyo Stock Exchange that close their books in March and released results as of Thursday.

The net profit downturn was experienced in the January to March quarter even in the manufacturing sector, an industry that has been leading the recovery from the COVID-19 pandemic, as profit sank 18.3 percent to 3.90 trillion yen.

The transportation equipment sector, including automakers, posted a 36.5 percent decline in net profit for the reporting quarter. Similarly, steelmakers suffered a 35.3 percent fall.

Food issues, which were directly impacted by soaring material costs, plunged by 47.7 percent. In contrast, energy-related and nonferrous metal companies benefited from elevated material prices.

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