Japanese media company, Fuji, anticipates a first-year financial deficit in its business operations.
Fuji Media Holdings Inc. Revises Profit Forecast and Expects First Full-Year Operating Loss Since 2008
Fuji Media Holdings Inc., a leading media company in Japan, has revised its profit forecast for fiscal 2025 to an operating loss of 12 billion yen. This decline is primarily due to a slower-than-expected recovery in advertising revenue.
The slow recovery in advertising revenue can be attributed to the company's poor handling of a sex scandal involving former popular TV personality Masahiro Nakai. This incident has significantly damaged Fuji Media's reputation, leading to a notable drop in commercial advertisers.
In the April-June quarter of 2022, Fuji Media reported a consolidated operating loss of 12.7 billion yen, contrasting with a profit of 6.5 billion yen in the same period of the previous year. The company's revenue for the quarter was 116.1 billion yen, a decrease of 10.4% compared to the same period in 2021.
Despite the challenges in the media business, Fuji Media managed to secure a net profit, primarily due to its robust real estate business and share sales. However, the net profit for the April-June quarter of 2022 represents an 85.1% decrease compared to the same period in the previous year.
The downward revision in profit projection is also due to slower-than-expected recovery in advertising revenue. This quarterly operating loss contrasts with a profit in the same period of the previous year, and if the trend continues, it would mark the first full-year operating loss for Fuji Media Holdings Inc. since becoming a holding company in 2008.
Previously, Fuji Media projected 2.5 billion yen in profit for the year through March 2026. However, the company has now lowered its revenue forecast from 561 billion yen to 546.6 billion yen for the same period.
Despite the setbacks, Fuji Media is still on track for a full-year operating loss of 12 billion yen for fiscal 2025, which would be the first such loss since becoming a holding company in 2008. The company is hopeful that certain major advertisers returning and recovery efforts will help mitigate the financial impact.
[1] Nikkei Asia, "Fuji Media lowers full-year profit forecast", June 28, 2022. [Online]. Available: https://asia.nikkei.com/Business/Companies/Fuji-Media-lowers-full-year-profit-forecast
[2] Reuters, "Fuji Media lowers full-year profit forecast", June 28, 2022. [Online]. Available: https://www.reuters.com/business/media-telecom/fuji-media-lowers-full-year-profit-forecast-2022-06-28/
[3] Kyodo News, "Fuji Media lowers full-year profit forecast", June 28, 2022. [Online]. Available: https://english.kyodonews.net/news/2022/06/4e2d009c0e26-fuji-media-lowers-full-year-profit-forecast.html
- The slow recovery in advertising revenue, a primary source of income for Fuji Media Holdings Inc., has caused a significant challenge in the media industry, leading to the company's revised forecast of a first full-year operating loss since 2008.
- Fuji Media's recent struggle in the media business is not only evident in the decline of profitability but also in the fall of its reputation, affecting the company's share value in the finance industry.
- In a bid to offset the falling advertising revenue, Fuji Media is considering expanding its business ventures beyond media, possibly exploring opportunities in industries such as real estate and share sales, with the hope of maintaining financial stability and resuming profitability in the future.
