ANA boosts profit forecast for past fiscal year by 20 percent
April 26, 2014, 12:01 am TWN
TOKYO--The operator of Japan's All Nippon Airways (ANA) on Friday boosted its net profit forecast for the past fiscal year by 20 percent, citing a pick-up in its international business.
ANA Holdings said it expects net earnings of 18 billion yen (US$175 million) in the year to March 31, up from an earlier 15 billion yen estimate.
The company, which will report its earnings next month, also lifted its revenue expectations to 1.60 trillion yen from a previous forecast of 1.58 trillion yen.
It offered few details in a brief statement, but said the improving outlook was “mainly due to international passenger service.”
Japanese firms have also benefited as sales recover in China, after slumping in late 2012 and into last year as a Tokyo-Beijing diplomatic row sparked a consumer boycott of Japanese brands in the key market.
Relations remain tense, but Japanese firms have reported sales are returning to pre-dispute levels.
The expected rise in ANA's bottom line comes several months after it said its nine-month net profit had dived by more than a third as a sharp decline in the yen jacked up fuel costs, which also hurt earnings at rival Japan Airlines.
While the yen's decline since late 2012 has boosted Japanese exporters such as Toyota and Sony, it has hurt airlines by pushing up the cost of fuel, often a carrier's single-biggest expense.
ANA's improved profit forecast is still well below the 45-billion-yen forecast it issued last year before chopping that number to 15 billion yen in October as its blamed high fuel prices and the delayed delivery of a modified Boeing 787 Dreamliner.
Both ANA and JAL have been working to recover from the global grounding of the Boeing plane last year.
The pair are the US-based firm's biggest customer for the state-of-the-art plane, which only resumed flying after a months' long grounding — caused by a series of battery problems — forced the cancellation of hundreds of flights.
The firms are also fighting off increasing competition from a handful of low-cost carriers that have sprung up in recent years in a market they have long dominated.
The yen has lost about a quarter of its value against the dollar since late 2012 following a policy blitz launched by Japanese premier Shinzo Abe and his hand-picked team at the Bank of Japan aimed at kick-starting economic growth and beating deflation.