Business

Brokerage business helps lift Rakuten's profit 2.3-fold

by Taiga Uranaka

Online shopping mall operator Rakuten Inc. reported Thursday 2.3-fold growth in its operating profit for calendar 2005 to 34.89 billion yen, buoyed by its stock brokerage business.

The firm did not offer an earnings projection for this year, but Chairman Hiroshi Mikitani said he expects similar or greater growth.

In 2005, Rakuten’s revenue nearly tripled to 129.78 billion yen, partly helped by the acquisition of credit card firm Kokunai Shinpan Co.

After taxes, the firm posted a profit of 19.45 billion yen, compared with a net loss of 14.27 billion yen the previous year, when it booked large costs related to acquisitions.

Profits from its securities business grew 2.6 times, thanks to a strong rally in the stock market. Its e-commerce and portal media businesses also posted sharp increases in earnings.

Mikitani said its businesses enjoyed strong synergy, noting the majority of new online brokerage clients were registered members of Rakuten’s shopping site.

As for its Rakuten Eagles baseball team, the company said it posted an operating profit of 156 million yen for the business year to Dec. 31 on revenue of 7.39 billion yen. It had initially expected a loss for the professional team’s first year, but the firm said it got corporate sponsorships and sold more tickets than it had projected.

However, Rakuten said the Sendai-based team was likely to incur losses for a while, since it is investing more in it, after the team floundered at the bottom of the Pacific League last season.

GET THE BEST OF THE JAPAN TIMES
IN FIVE EASY PIECES WITH TAKE 5