Kinki Nippon to post net loss of 7.8 billion yen

Due to sharp drops in the number of tourists and in tour prices -- as well as canceled tours for the World Cup games in France -- Kinki Nippon Tourist Co. announced Friday it will post a net loss of 7.8 billion yen for the current business year.

It earlier projected a 1.6 billion yen net profit. The firm also reversed its 3.1 billion yen unconsolidated pretax profit projection to a pretax loss of 7.2 billion yen for the business year ending December 31, 1998.

Reflecting the ongoing economic slump and the depreciation of the yen, the company said overseas travelers on its tours dropped 15 percent from the previous year during the first half.

Since the firm failed to obtain World Cup tickets, it canceled tours and paid 50,000 yen in apology money to 6,000 people who had booked tours, meaning additional costs of 1.1 billion yen in the current year, Kinki Nippon said.

The firm also announced an overall restructuring program for the year, including the introduction of a voluntary retirement program and reduction of bonuses and basic salaries of its employees.