Pretax profits at some 1,230 leading Japanese companies, excluding banks and brokerages, extended their record-shattering spree to a fourth straight year in the year to March 31 by totaling 33.12 trillion yen, up 6.5 percent from the previous year, a think tank reported Friday.
But the margin of growth slowed from the previous business year’s 11.2 percent, according to Shinko Research Institute, the research arm of Shinko Securities Co.
Shinko economists traced the fiscal 2006 profit expansion mainly to the yen’s fall against the euro and the dollar and spirited economic activity in the United States, Europe and other overseas markets, which helped boost performances at export-oriented companies.
They noted that the slowdown in the year-on-year profit growth stemmed from mammoth losses at major consumer loan companies that were forced to set aside large provisions to meet their borrowers’ demands to return the excessive interest they charged.
When excluding 27 consumer lenders and other nonbank financial institutions from the polled firms, the major companies’ combined pretax profits for the business year advanced by a steeper 10.5 percent, they said.
Pretax profits expanded in 25 of 30 business sectors into which these leading companies are classified, according to the think tank.
The 25 include electrical appliance makers whose home digital appliance sales were lively and machinery makers that benefited from various firms’ outlays on production at home and overseas.
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