McDonald's Japan forecast a profit recovery for 2006 on Friday, as its strategy to boost product value, which hurt its per-customer spending last year, makes steady progress and contributed to higher sales.

The nation's biggest fast-food chain, owned almost 50 percent by McDonald's Corp., forecast group operating profit in the full year to December of 4.5-7 billion yen ($37.86-58.89 million).

That would represent a 40-118 percent rise from a year earlier and compares with an average forecast of 5.25 billion yen by four analysts questioned by Reuters Estimates.

McDonald's Holdings Co. (Japan) posted a 55.7 percent fall in group operating profit to 3.21 billion yen for the year ended in December after its one-coin menu, introduced last April, set prices of most products lower than before and slashed per-customer spending.

Full-year net profit sank 98.3 percent to 60 million yen, hurt by a one-off loss resulting from back pay owed to employees following a decision to change its clocking-in system, which had rounded down minutes and did not show correct working times.

The results were expected after it revised its 2005 earnings estimate for a fourth time in January.

Same-store sales and average customer spending have recently been improving, helped by strong sales of limited-time offers such as on shrimp burgers. The company forecast a 0.5-3.5 percent year-on-year rise in same-store sales this year.

"The value strategy takes at least six months before it pays off," McDonald's Japan Chairman and President Eikoh Harada told a news conference. "The strategy has been making steady progress and has been a success."

The strategy aims to raise product value from a customer's point of view.

Shares in McDonald's Japan fell 13.5 percent in 2005, underperforming a 24 percent rise in the Tokyo Stock Exchange's foods subindex IFOOD.in the same period.

Ahead of the announcement, McDonald's Japan closed down 0.31 percent at 1,901 yen on Friday. The Nikkei share average lost 1.11 percent.