The nation's biggest travel agency JTB group posted a record net loss of 105.1 billion yen in its consolidated financial results for the business year that ended on March 31, due to a plunge in tourism demand amid the prolonged coronavirus crisis.
To reinforce its financial base, JTB said on Friday it has been negotiating with financial institutions to underwrite capital increases. The capital increase is expected to reach tens of billions of yen.
JTB last posted a net loss two years ago when its overseas business was sluggish, but the following year it posted a net profit of 1.6 billion yen on a consolidated term.
Sales in the year ended in March 2021 stood at 372.1 billion yen, down 71.1% from a year earlier. By segment, JTB's domestic travel business dropped 66.4% from a year earlier, while its overseas travel business sank as much as 94.9%.
Due to the huge net loss, JTB's capital-to-asset ratio as of the end of March stood at 6.9%, plummeting from 24.3% at the end of the same month last year.
JTB said it expects to go back into the black on a consolidated term in the current business year ending on March 31, 2022, as demand for domestic travel is expected to recover to a certain extent from July onward, due to progress made in COVID-19 vaccinations, the company expects.
"We'd like to weather through this environment, together with all of those in the tourism industry who are suffering," JTB Corp. President Eijiro Yamakita said during an online press conference on Friday. "By all means, we will achieve the target of going into the black."
JTB carried out a capital reduction as of the end of March from 2.304 billion yen to 100 million yen to take advantage of tax perks.
JTB expects to realize a personnel reduction of about 7,200 at home and abroad for the year ended in March 2022, compared with two years before, through retirements and a freeze on the hiring of new college graduates.
JTB has also decided to reduce the average yearly pay of its employees by about 30%, while moving ahead with other cost-reduction measures. It has already realized the closure of 73 branches at home.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
