Japan's big six shipbuilders posted mixed results for the six-month period ending Sept. 30 and analysts expect little change until the yen loses value against the U.S. dollar.

The Japanese yen, which appreciated as much as 20 percent against the U.S.

dollar this year, is now about 13 percent higher than it was in January. Most Japanese shipbuilders have seen their yen-based costs rise sharply relative to their dollar-based revenue."It more or less just points to a worsening environment," said Peter Boardman, senior analyst with UBS Ltd. "Shipbuilding won't come back unless the yen weakens."

Kawasaki Heavy Industries Ltd. reported net earnings of 5.4 billion yen (US$49.9 million) - a 28.9 percent increase over a year earlier - on revenue of 369 billion yen, while Hitachi Zosen Corp. showed net earnings of 3.8 billion yen - a 10 percent jump - on revenue of 138.5 billion yen. One U.S. dollar is worth 108 yen.

Mitsui Engineering and Shipbuilding and Mitsubishi Heavy Industries Ltd. showed little net income change. Mitsui's net income was down 0.4 percent at 2.6 billion yen, on sales of 122.7 billion yen, while industry leader Mitsubishi showed a 1.1 percent net income hike to 42.4 billion yen, on sales of 1,056.5 billion yen.

Ishikawajima-Harima Heavy Industries Co., meanwhile, saw a 3.7 percent drop in net earnings to 7.1 billion yen on sales of 453.4 billion yen, while Sumitomo Heavy Industries suffered a net loss and its first recurring loss in six years. Its net loss was 1.7 billion yen and its recurring loss 1 billion yen on sales of 109.8 billion yen.

Hitachi Zosen was the only company that really made money from its shipbuilding operations, Mr. Boardman said. This company had contracts signed 18 months ago to build environmentally conscious garbage ships for Japan's Ministry of Construction.

After the contracts were signed, the ministry agreed to pay more, Mr. Boardman said. The government said this was a way to spur Japanese employment during the recession and to help the economy. The revised contract price came at a time when Hitachi Zosen also was paying less for components because of the recession, which all combined to give the company higher margins, Mr. Boardman said.

While Kawasaki Heavy showed good results, these had little to do with shipbuilding but generally stemmed from lower interest rates. Shipbuilding companies have a high debt-to-equity ratio so the reduced debt cost helped the company's recurring profits. "Actual profits from shipbuilding did not improve," Mr. Boardman said.

Analysts say most Japanese shipbuilders are not seeing the benefits of lower imported component costs. What is starting to happen at some of the shipbuilding companies, however, is an indirect benefit. Some of them are setting up parallel distribution channels for non-shipbuilding-related imported goods such as clothing, other retail goods and pumps.

The shipbuilders then use the profits from these import transactions to help bolster their balance sheet. "It would be better to import Korean steel (and use this in their own shipbuilding)," Mr. Boardman said. "But they don't want to cut out their existing suppliers."

Japan's system of supplier networks is generally built up over many years with the implicit understanding that both sides will help each other out if times get tough.

Where shipbuilders in other countries would be tempted to use cheaper steel imports when the currency appreciates, Japanese shipbuilders are often loathe to take such a "disruptive" step against their domestic suppliers.