Rakuten expects 65.64 bil. yen in appraisal losses from TBS stake+

TOKYO, Dec. 30 Kyodo - Japan's largest online shopping mall operator Rakuten Inc. said Tuesday it expects to report about 65.64 billion yen in appraisal losses for the year ending Dec. 31, mainly from its stake in Tokyo Broadcasting System Inc.

The company did not provide full-year earnings forecasts, citing volatility in
the Internet and securities industries, but the valuation losses are likely to
force the company to fall into the red for the current fiscal year.
Rakuten, the largest shareholder of TBS, said the losses stemmed partially from
a steep fall in the Japanese broadcaster's share price caused by a decline in
corporate value from sagging advertising revenue.
Rakuten invested over 110 billion yen, or an average 3,095 yen per share, to
acquire a 19.8 percent stake in TBS, but TBS's stock price has more than halved
since then to finish Tuesday at 1,364 yen on the Tokyo Stock Exchange.
While revenues from its Internet mall and online advertisement business have
been strong despite the global economic downturn, attention has centered on
whether Rakuten will consider selling its TBS shares as it faces the prospect
of logging a group net loss for the first time since the business year that
ended in December 2004.
Earlier this month, TBS gained shareholder approval to become a holding company
next April, fending off Rakuten's move to integrate their management. Under the
holding company system, a shareholder can only own up to a 33 percent stake in
the company.
In 2007, Rakuten's group net profit swelled about 14 times to 36.90 billion
yen, due to a one-time gain stemming from sales of shares in its travel unit.
The company is scheduled to release its earnings results for 2008 in mid-February.
==Kyodo
2008-12-30 21:55:28