Japan's ANA cites 'terrorism' in 20% quarterly profit drop

The parent company of Japan's All Nippon Airways on Wednesday cited "terrorist incidents" in Europe helped drag its April-June net profit down more than 20 percent.

ANA Holdings posted net profit of 6.6 billion yen ($65.8 million) for its fiscal first quarter, more than a fifth lower than the same period last year, adding that a strong yen also took a bite out of its bottom line.

The airline's cargo business struggled in the quarter, while demand for domestic flights were affected by deadly earthquakes in southern Japan in April.

"Revenues and profits for the period were affected by (the) Kumamoto earthquake and terrorist incidents in Europe, in addition to exchange rates and crude oil market conditions," ANA said.

A sharp rally in the yen is threatening profits at major Japanese firms as it makes them less competitive overseas and shrinks the value of repatriated profits.

Despite militant attacks in Belgium and France weighing on demand for Europe-bound flights, the carrier said its overseas business still posted stronger results owing to an expansion of international routes.

ANA left its profit and sales forecasts unchanged for the fiscal year to March 2017. It expects net profit to reach 80 billion yen, operating profit at 145 billion yen and sales of 1.81 trillion yen.

The results come after rival Japan Airlines said last week its three-month net profit more than halved.

It said savings from a decline in fuel costs could not make up for weak travel demand at home and abroad.

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