The non-manufacturing sector grew 32 percent from April to September, while the manufacturing sector grew 24 percent. The automotive sector is driving overall profits, while the retail and leisure and entertainment sectors are also boosted by increased visitors to Japan.
The results of Japanese companies remain strong. Nihon Keizai Shimbun on the enterprise’s April to September 2023 earnings statistics found that net profit increased by 30%, is expected to hit a record high level. The auto industry is driving overall profits, thanks to factors such as the effect of a weaker yen, while the retail and leisure and entertainment sectors are also boosted by the increase in tourists visiting Japan. Despite the emergence of risk factors such as the sluggish Chinese economy, corporate performance has generally remained at a high level.
The statistical objects are 393 companies listed on the Topix prime market that have announced their financial reports for April to September as of November 2 (excluding subsidiaries listed by both parent and subsidiary companies, etc.), accounting for nearly 40% of the companies whose fiscal year ended in March. The results showed that the non-manufacturing sector grew by 32 percent to about 6 trillion yen, while the manufacturing sector increased by 24 percent to about 7 trillion yen.
In the non-manufacturing sector, 133 companies, accounting for 65 percent, showed a stronger recovery. Among them, the increase in tourists to Japan has brought positive winds to leisure and travel-related businesses. Oriental Land, which operates the Tokyo Disney Resort, posted a record net profit of 54.5 billion yen for the April-September period, boosted by a rebound in traffic and merchandise sales for its 40th anniversary event. The combined net profit of three JR companies in Honshu also doubled.
In manufacturing, autos were strong as supply constraints such as semiconductors eased. Toyota’s net profit rose 2.2 times from a year earlier to 2.5894 trillion yen. A weaker yen boosted operating profit by 260 billion yen, as did price increases. According to SUBARU, the weaker yen boosted operating profit by Y62.5 billion.
On the other hand, due to the slowdown in China’s economy, raw materials, electronic parts and equipment investment related enterprises performed poorly, and profit growth enterprises accounted for only 50%. Advantest Testing suffered a 64% drop in net profit due to a drop in smartphone sales in China. Semiconductor manufacturers are less willing to invest, and shipments of test equipment are in a slump. From the perspective of Sumitomo Chemical, with the sluggish demand for resins in China and the deterioration of supply and demand around the world, there was a final loss of 76.3 billion yen due to the impact of lower sales volume.
In the downwardly revised manufacturing sector, lower product shipments offset the benefit of a weaker yen. Omron was hurt by slowing investment in semiconductor – and battery-related equipment in China and elsewhere, and its control equipment business was sluggish. Keiichi Iwata, president of Sumitomo Chemical, said that “the oversupply [of general petrochemical products] will not disappear soon”.