Advertising king Dentsu Inc. said Wednesday that its pretax profit and operating revenues for the business year ended March 31 dropped for the first time in five years.
The poor results were pinned on sinking television advertising revenues amid the prolonged recession.
Dentsu's unconsolidated pretax profit sank 20.9 percent to 25.8 billion yen, while operating revenues dipped 4.3 percent to 1.293 trillion yen.
Although ad revenues also declined in the leisure, food, services, and automotive industries, gains were made in finance, insurance and home electronics, according to the company.
TV ads account for some 50% of Dentsu's total operating revenues, but income from that department slipped 4.9 percent while revenue from newspaper ads dropped 5.2 percent. Marked declines were also seen in radio and magazine advertising.
Operating profits for the year dropped 28.6 percent to 21 billion yen, but nonoperating profits shot up 49.8 percent to 4.8 billion yen, due to a large reduction in Dentsu's interest-bearing liabilities.
For the current fiscal year ending March 31, 2000, Dentsu expects a 1 percent rise in operating revenues to 1.295 trillion yen.