Japanese supermarket chain Daiei revealed today (20 April) that its group net profits dropped 90% in 2006, despite an increase in pre-tax profits.
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Daiei said the sharp decline was the result of a debt waiver related gain of JPY400.4bn (US$3.37bn) booked in 2005.
Daiei is now in the third year of its government-backed recovery programme.
Daiei’s operating revenues, which include supermarket sales and income from its credit card division OMC Card, fell 23.4% to JPY1.28trn. This drop, the company said, was the consequence of store closures as the group ends trading at unprofitable outlets and the sale of subsidiaries.
Pre-tax profits rose 53.7% to JJOY37.29bn, partly due to the reduction in its interest-bearing debt. Nevertheless, net profits declined to JPY41.3bn.
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By GlobalDataLooking to the current year, Daiei forecast net profits of JPY13bn and pre-tax profit of JPY22bn. The supermarket operator predicted operating revenues of JPY1.22trn.
