June 3, 2014 5:32 am JST

Startups' profits jumped 23% in fiscal 2013

TOKYO -- The combined pretax profits of listed startup companies in Japan recovered remarkably well in fiscal 2013, surpassing their pre-financial-crisis tally.

     The aggregate pretax profit of 874 companies on the Tokyo Stock Exchange's Mothers market, Osaka Securities Exchange's Jasdaq market and three other markets for startup stocks came to 881.2 billion yen ($8.55 billion), over 20% higher than in fiscal 2007.

     Their combined sales, however, fell 2% short of the fiscal 2007 level, but were up 8% on the year at 15.8 trillion yen. Cost-cutting efforts and the larger share of highly profitable companies pushed up overall earnings.

     Smartphone game provider GungHo Online Entertainment Inc. saw its pretax profit surge 860% to 90.1 billion yen, outperforming all the others, thanks to the popularity of its role-playing game "Puzzle & Dragons." Similarly, Crooz Inc.'s parent-only pretax profit more than doubled, helped by its smartphone games.

     Chipmaking equipment manufacturer NuFlare Technology Inc. also enjoyed a tailwind from the spread of smartphones. It logged 18% profit growth to a record high, helped by brisk sales to chipmakers in North America and South Korea.

     As Japanese automakers regained their competitiveness on the back of a weaker yen, parts provider G-Tekt Corp., which makes pressed components for auto body frames, logged 17% profit growth. Electric connector maker Iriso Electronics Co. saw its profit double on strong sales of automotive products, including those used in car navigation systems.

     Companies that boast unique services and products also performed well, among them working-wear maker Workman Co. and Nagase Brothers Inc., which operates preparatory schools for university admission exams.

     In the retail industry, a surge in demand before the April 1 sales tax hike bolstered profits. Profit at Seria Co., which operates 100-yen stores, climbed 24%, and appliance retailer Nojima Corp.'s jumped 120%, both benefiting from propped-up sales in March.

     The figures covered companies that closed their books on March 31, excluding those in the financial sector, and which provided comparable fiscal 2007 data.