POORER CURRENT PROFITS SEEN FOR JAPAN FIRMS
Poor returns by oil refiners and utilities
will drag down average current profits of major Japanese firms
in the year ending March 31, Wako Research Institute said.
    Current profits will drop an average 13.5 pct after a 7.3
pct drop in 1986/87, it said.
    Oil refiners and utilities face a sharp profit fall after
two years of high profits due to the yen's strength, lower
world oil prices and reduced interest rates, it said.
    Sales of all firms are expected to rise 2.3 pct from the
previous year when they fell 11.9 pct from a year earlier.
    The independent institute surveyed 436 firms listed in the
first section of the Tokyo Stock Exchange, excluding banks and
insurance firms. Excluding the oil refiners and utilities, Wako
forecasts that current profits will rise 3.7 pct after a 22.3
pct drop in 1986/87 and a 19.5 pct drop in 1985/86.
    Electric power firms and gas companies are likely to see
42.5 and 31.6 pct falls in current profits respectively in
1987/88 due to cuts in utility prices to recycle windfall
profits made during the yen's rise against the dollar, and due
to the recent recovery in world oil prices, the institute said.
    Current profits of manufacturing industries will rise an
average seven pct after a 29.7 pct drop in 1986/87 and a 25.0
pct drop in 1985/86, Wako said.
    An increase in overseas production and an expected increase
in domestic demand will cause the recovery in manufacturing
sector profits, it said.
 REUTER
