Japan's advertising giant Dentsu Group Inc. on Monday reported a record net loss of 159.60 billion yen ($1.5 billion) in fiscal 2020, as its mainstay advertising business slumped amid the coronavirus pandemic.
The annual loss almost doubled from 80.89 billion yen in fiscal 2019 after Dentsu had to record an impairment loss related to its overseas business.
Sales fell 10.4 percent to 939.24 billion yen and an operating loss of 140.63 billion yen was reported in the 12 months through Dec. 31, Dentsu said. It did not give an earnings outlook for fiscal 2021, citing uncertainty over the pandemic.
The spread of the novel coronavirus reduced economic activity globally in 2020, affecting the advertising industry that is sensitive to economic trends. The health crisis has hit businesses to varying degrees, with companies in the services sector suffering a severe blow.
Dentsu saw advertising hit by the pandemic both in Japan and other parts of the world such as Europe. The firm said it will proceed with structural reforms while soliciting early voluntary retirement.
"The current placement of our employees is not best suited to provide necessary services to our customers," Dentsu executive officer Arinobu Soga said during an online press briefing.
On the possibility of selling its headquarters building in Tokyo's Minato Ward, Soga said, "It's true that we are considering it as we look ahead. But there has been no progress since January when some reports emerged (of a potential sale)."
Sources close to the matter told Kyodo News last month that Dentsu was considering selling its 48-story building for some 300 billion yen, a price that would make it the highest-priced building ever to be sold in Japan.
The idea came about in response to the pandemic-triggered change in workstyles. Most Dentsu employees have been working remotely.
The sources said at the time that Dentsu had no plans to move its headquarters from the current location and would pay rent for office space even if the sale of the building was to be realized.