Dentsu Group Inc. said Wednesday it expects to log a group net loss of ¥80.89 billion ($730 million) in the business year ended last December due to sluggish operations in China and Australia, falling into the red for the first time since it went public in 2001.
Japan’s largest advertising agency operator previously projected a net profit of ¥6.2 billion for the year. Dentsu said it saw a rapid change in the competitive environment in China and Australia, while costs linked to past acquisitions also increased.
At an operating level, it forecast a loss of ¥3.36 billion against a previously estimated profit of ¥60.90 billion.
Dentsu said that in China, business was hit by “a rise of local platformers and competition with local advertising companies,” forcing it to book an asset impairment loss of ¥70.1 billion. It also said that in Australia, it lost a number of clients.
The figures mark Dentsu’s third downward revision in its earnings estimate for the year ended in December. The company will report its results for the year on Thursday.