October 31, 2017 6:00 pm JST (Updated November 1, 2017 3:09 am JST)

First half shows broad gains for corporate Japan

Profit rises for more than two-thirds of companies on strong global economy

MASAMICHI HOSHI, Nikkei staff writer

Sony Executive Deputy President and Chief Financial Officer Kenichiro Yoshida announces the company's 2Q results.

TOKYO -- Corporate Japan enjoyed a fruitful April-September half, with 71% of listed companies reporting an increase in net profit for the period, according to Nikkei Inc.'s tabulation of interim results released through Tuesday.

That marks the highest proportion of gainers in four years and the best result since the same period of 2013 -- just when Prime Minister Shinzo Abe's economic stimulus package, or Abenomics, was getting underway. The figure was lifted by exporters such as electronics and machinery manufacturers, whose results were helped by a cheaper yen and a robust global economy.

The Nikkei aggregated the results of 501 nonfinancial companies reported by Tuesday, accounting for 32% of businesses whose fiscal years end in March and 40% of this group's total market capitalization.

Aggregate net profit at these companies grew 49%, the first rise in two years. The U.S. dollar averaged around 111 yen during the half, compared with 105 yen a year before. The weaker currency pushed up exporters' revenues and profits.

Sony reported Tuesday a net profit of 211.7 billion yen ($1.86 billion) for the half through September, eight times the figure from the same period last year and its first record high for the half in a decade. "The demand for semiconductors and television sets surpassed our expectations," said Executive Deputy President Kenichiro Yoshida. Brisk sales of image sensors contributed as well.

Japan Airlines enjoyed a 9% year-on-year net profit increase to 77.9 billion yen, with the favorable global economy spurring travel and transport.

Infrastructure and capital spending also started to pick up. This helped Mitsubishi Electric post a record net profit of 131.1 billion yen, a 48% increase.

Tech tailwinds

Though this strong performance owes generally to a solid global economy, three factors played particularly significant roles. One is worldwide demand for chips as the expanding "internet of things" pushes demand for memory at data centers and elsewhere.

Shin-Etsu Chemical's net profit for the half climbed 27% to an all-time high of 110.7 billion yen. The supply-demand balance for silicon wafers used in chip production "has been extremely tight since January, and it got even tighter after summer," Senior Managing Director Masahiko Todoroki said.