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One-fourth of Japan Inc. logs record profit for fiscal 2015

Foreign tourists in Japan gave a major boost to corporate earnings.

TOKYO -- One-quarter of listed Japanese companies have reported record pretax profit for the year ended in March as inbound tourism and low resource prices buoyed corporate earnings.

This record profit was achieved by 26% of companies that reported results by Monday, data compiled by The Nikkei shows. Pretax earnings improved at 61% of all companies covered.

Keisei Electric Railway's pretax profit increased 15% to reach a record. "Thanks to more foreigners visiting Japan, special express train services connecting Narita Airport and central Tokyo fared well," Director Toshiaki Koyama said. Fare revenue from such train services including the Skyliner rose 11%.

Many other domestic-demand companies enjoyed similar tailwinds. Cosmetics maker Kose booked a third straight year of record profit thanks to brisk demand for its mainstay brands Sekkisei and Albion. Railway operator Sotetsu Holdings savored strong performance in its hotel business. The Yokohama Bay Sheraton Hotel & Towers, where foreigners account for some 35% of guests, maintained high occupancy rates and price per room rose 12%.

Natori, which specializes in snacks that accompany alcoholic beverages, booked a second straight year of record profit by accurately predicting consumer trends. The company anticipated that "drinking-in" of wine and other alcohol would increase, and thus beefed up cheese and jerky products, which go well with Western beverages, the company's accounting chief said.

Cheap resources including crude oil were a major boost, too. Corporate Executive Officer Yuji Hirako cited the drop in fuel costs along with strong international performance as ANA Holdings booked record profit for the first time in three years. Tokyo Gas also snared its highest profit with help from lower materials costs linked to cheaper liquefied natural gas.

Small and midsize companies strong in niche markets also ascended to new heights. Nihon M&A Center announced a six-year streak of record pretax profit as the company captured demand for brokerage services from aging corporate managers looking to sell mainly small and midsize businesses. Taiyo Holdings, which has a strong market presence in special ink that protects electronic circuits, also booked record profit.

More than 20% of companies forecast record pretax profit for fiscal 2016. But the earnings environment likely will be tougher, with crude oil prices picking up from earlier this year. If the yen stays strong, the appetite of foreign shoppers visiting Japan could be dulled as well.

(Nikkei)

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