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2010年5月18日 (火)

企業決算 本格回復への道は半ばだ

The Yomiuri Shimbun (May. 18, 2010)
Further corporate effort needed for full recovery
企業決算 本格回復への道は半ばだ(5月17日付・読売社説)

After hitting bottom, corporate performance is on the road to recovery, but future prospects are far from certain. The economy seems to be only halfway toward a full-scale recovery.

Settlements of accounts in March by firms listed on the First Section of the Tokyo Stock Exchange have reached their peak. After-tax profits by all listed firms are expected to turn into the black for the first time in two business years.

In their settlements of accounts that ended in March 2009, major Japanese companies suffered huge losses when they chalked up their worst postwar performances due to the global recession caused by the bankruptcy of Lehman Brothers in the autumn of the previous year.

Many firms were prepared for deficits for the second straight business year. However, most of them saw their balance of accounts turn into the black or were able to reduce their deficits drastically.

The after-tax profits of about 30 percent of big businesses returned to levels seen before the Lehman shock. This means they were able to apply the brakes on deteriorating business faster than anticipated and overcome hard times.


Trimming fat pays off

The primary reason behind their recovery is their restructuring efforts, particularly in cutting personnel and production costs. By trimming the fat, the profits of all listed companies increased despite a drop in sales from a year earlier.

Carmakers and electrical appliance manufacturers, which boosted exports to China and other emerging markets that extricated themselves from the global recession ahead of other countries, served as locomotives for the recovery of listed firms.

They probably rode on the tails of stimulus measures taken by each country to aid the purchase of automobiles and digital household appliances.

A case in point is Honda Motor Co., which doubled its profits. Toyota Motor Corp., for its part, chalked up a profit for the first time in two business years. Hitachi, Ltd., which suffered an enormous deficit in fiscal 2009, is recovering sharply and a swing into the black is in sight.

On the other hand, nonmanufacturing industries such as retailing, real estate and trading have fought uphill battles and their degree of recovery varies.

Shiseido Co. is strengthening its strategy to find a way out of its predicament by tapping the Asian market. It is vital for domestic demand-oriented firms to take advantage of foreign demand.


Environment still tough

But the environment surrounding corporate management is still severe. Therefore, it is natural for many businesses to be circumspect about their performance for the business year ending next March.

Although the global economy has picked up, apprehensions have risen once more in the wake of Greek fiscal crisis. If the business slowdown of Europe is protracted, its effect could spread elsewhere in the world. A radical appreciation of the yen against the euro would cut into the profits of Japanese exporters.

The effect of pump-priming measures adopted by various countries has eased off. Another concern is the rise in prices of iron ore and other resources.

Each firm must further accelerate its "choice and concentration" of business and bolster its financial base.

Recovery efforts based on restructuring have their limit. It is indispensable for companies to be more aggressive in pioneering new growth markets and developing competitive products.

(From The Yomiuri Shimbun, May 17, 2010)
(2010年5月17日01時27分  読売新聞)


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