TOKYO (Reuters) - Japanese trading house Sojitz (2768.T) said on Thursday it expects its full-year net profit to plunge 34% in the face of coronavirus shutdowns that have crippled global activity.
The estimated profit could drop further if the lockdown continues more than three months, Chief Executive Officer Masayoshi Fujimoto said, adding that an extension of the shutdown by another month would reduce its profit by about 8 billion yen ($75 million).
“The coronavirus pandemic will have a bigger impact (on earnings) than the collapse of commodity prices in around 2015 and the global financial crisis (in 2008),” Fujimoto said.
Japanese Prime Minister Shinzo Abe declared a state of emergency earlier this month to fight coronavirus infections in major population centres and rolled out a nearly $1 trillion stimulus package to soften the economic blow.
The restrictions will add to pains the virus is inflicting on the world’s third-largest economy, which probably already is in recession as supply chain disruptions and travel bans chill factory output and consumption.
“We estimate the coronavirus impact to have a negative impact of 23 billion yen for this year on assumption that the current global lockdown continues for three months (through June),” he said, adding that it will likely take at least a year for the global automobile market to recover completely.
Sojitz expects its net profit for the year ending March to fall 34% to 40 billion yen from a year earlier, and could fall short of the 49.7 billion yen as estimated by three analysts in a poll compiled by Refinitiv.
The Japanese company also reported on Thursday a drop of 14% in net profit to 60.8 billion yen for the year ended March 31, missing its forecast of 66 billion yen due in part to an impairment loss on its stake in oil and gas assets in North Sea in the face of plunging oil prices.
“Although we will miss our profit target of 75 billion yen for this year mapped out by the three-year business plan, we will continue to invest to build a portfolio of prime assets,” Fujimoto said.
Reporting by Yuka Obayashi, Editing by Sherry Jacob-Phillips