Dentsu Inc. on Wednesday blamed sluggish advertising revenues amid the stagnant economy for a 15.6 percent drop in operating profits in the 2001 business year.
The nation's No. 1 advertising company said its consolidated operating profits in the year to March 31 dropped to 61.17 billion yen and its consolidated pretax profits fell 17 percent to 59.71 billion yen. Consolidated net profits came to 27.46 billion yen, down 33.6 percent, company officials said.
Group sales decreased 1.4 percent to 1.79 trillion yen.
Hitoshi Hanatsuka, a Dentsu senior managing director, said sales from information and telecommunications businesses and cosmetics makers dropped more than 10 percent, while automakers and financial service firms increased their advertising.
For the current business year, Dentsu expects profits and sales to continue to slip, despite predicting a boost from the World Cup soccer championships, Hanatsuka said.
Dentsu expects the event, to be hosted by Japan and South Korea between May 31 and the end of June, to create 50 billion yen to 60 billion yen in sales and 5 billion yen to 6 billion yen in operating profits.
The company forecasts group sales of 1.74 trillion yen, consolidated pretax profits of 46.8 billion yen and consolidated net profits of 13.2 billion yen.
Dentsu announced that Tateo Mataki, executive vice president, will take over as president from Yutaka Narita, who will become chairman. The change will occur June 27 after gaining approval at a general shareholders' meeting.