Coronavirus News Asia

Japan Inc delays earnings update amid virus carnage

In a nation that celebrates its salaryman as modern-day samurai and is home to globally famed brands, it takes something pretty catastrophic to delay the release of corporate earnings.

It happened in 2011 the year a giant earthquake and nuclear crisis shook Fukushima, just 240 kilometers from the Tokyo Stock Exchange. It happened after a January 1995 trembler killed more than 6,000 people in Kobe, 33 kilometers from the Osaka Stock Exchange.

Only in times of extreme turmoil can Japanese companies delay required reporting that is required as part of their fiduciary duty. One of those times is now, as a range of firms postpone their releases until the first half of May.

The reason: Covid-19 disruptions to data gathering from subsidiaries in China, the US and beyond. This has impacted reporting for fiscal year 2019, which ended in March this year, and is also impacting Q1 reports.

However, indications from the few companies that have released their results suggest Japanese investors are in for scary reading.

By the numbers

All Nippon Airways Holdings for example, saw net profit fall 75%, the biggest-ever group loss of US$549 million in fiscal year 2019. Canon’s net profit for the same period fell 30% as the Japan Inc. icon withdrew this year’s earnings outlook.

The carnage to come can be seen in frantic maneuvering in boardrooms throughout Asia’s second-biggest economy.

Nissan is expected to erase 46% of earlier projected earnings for the year that ended in March, in what’s sure to be its first net loss in 11 years. Mitsubishi Motors is seeking $2.8 billion in loans from both domestic and foreign lenders. The earlier-mentioned ANA, meantime, just secured $8.8 billion in credit amid fast-rising cash flow concerns.

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