Japan Post Holdings said on Tuesday it will book its first annual loss in at least a decade, after unveiling a $US3.6 billion ($4.7 billion) writedown on its Australian logistics arm Toll Holdings.
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Japan Post estimated its loss at 40 billion yen ($470 million) for the year ended in March, becoming the latest Japanese company to stumble after a high-profile overseas acquisition.
Japan Inc has spent heavily on overseas mergers and acquisitions in recent years, often paying hefty premiums to tap growth overseas amid dismal prospects at home.
But many bets have failed. Toshiba is expected to report a net loss of around 1 trillion yen due to charges related to the bankruptcy of its Westinghouse nuclear unit, which it acquired in 2006.
Japan Post will cut more than 1700 jobs at Toll in the year to March 2018, but the company will still remain a "core unit" for Japan Post Group, said its president, Masatsugu Nagato, at a press conference.
"The price we paid for Toll was high," Mr Nagato said. "The writedown is intended to wipe the slate clean."
Japan Post, a conglomerate that spans postal delivery, banking and insurance, had originally forecast 320 billion yen in net profit for the financial year ended in March, down 25 per cent from the previous year.
The company, 80 per cent owned by the government, bought Toll in May 2015 for $6.5 billion in a deal designed to boost its global logistics reach and offset a decline in its domestic postal operations.
At the time of the Toll deal, Toru Takahashi, then-chief executive of Japan Post, had said there would be no major job cuts at Toll.
But Toll has been hit with a drop in parcel volumes as Australia's economy is buffeted by falling commodity prices, leading Japan Post to book the writedown charge.
Despite Toll's problems, Nagato said Japan Post was "constantly looking out for other acquisitions, including those beyond the logistics sector."
Reuters
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