Four Japan Post spinoffs projected to be in black in FY 2008
The government projects that the four entities that will take over mail delivery, postal savings, postal insurance and post office network management from Japan Post after its privatization starting in fiscal 2007 will all be in the black in fiscal 2008, government sources said Tuesday.
The government’s preparatory office for postal privatization projects that only the postal insurance company will be in the red in fiscal 2007, when the 10-year privatization process begins, they said.
The office is scheduled to report its 10-year projections of earnings by the four units from fiscal 2007 at a meeting of experts to be held Wednesday, the sources said.
The government’s work to compile legislation on postal privatization is expected to gather momentum following the presentation of the projections, the sources said.
The government estimates are based on the assumption that the spinoff entities do not start new businesses or pay corporate tax.
By unit, net profit of the mail delivery entity is expected to reach 38.2 billon yen in fiscal 2007 but is estimated to decline to 10.4 billion yen in fiscal 2016 due to a projected fall in mail delivery volume.
For the post office network management unit, the government expects most of its revenues to consist of commissions from the remaining three Japan Post spinoffs. Its net profit in fiscal 2007 is estimated at 204 billion yen, but the amount is forecast to shrink to 68.2 billion yen in fiscal 2016 due to an expected drop in the commissions.
The postal savings body will post net profits of 228.9 billion yen in fiscal 2007 and 148.3 billion yen in fiscal 2016 on the assumption that interest rates will remain at the current levels, with proceeds from postal savings mainly invested in government bonds.
The postal insurance unit is expected to report 35.1 billion yen in net loss in fiscal 2007, but swing into the black the following fiscal year and post a net profit of 30.1 billion yen in fiscal 2016.
The government is planning to compile another estimate in the future that will cover new businesses to be launched by the spinoff entities, the sources said.
The state-backed Japan Post was launched in April last year, taking over the three main service fields of the Postal Services Agency — mail and parcel delivery, postal savings, and “kampo” life insurance.
