TOKYO — Japanese movie studio Shochiku Co., still reeling from a management shake-up, said on Thursday it is expected to post its first net loss in a quarter century for the year ended Feb. 28. The company is projecting a 9.8 billion yen ($77.78 million) loss for the year.
Shochiku had predicted a profit of 370 million yen ($2.96 million) for the year but it took hits from a poor results in its movie distribution business and its Kamakura Cinema World theme park.
Its last net loss was in fiscal 1973.
Shochiku is likely to be the only major Japanese studio in the red for the year. Toho Co. revised upward its profit forecast for the year because of the enormous success of the film “Princess Mononoke.” Toho distributed the film, which at a gross of more than $150 million is the all time box office champ in Japan. Toei Co. also scored big with distribution revenue from the hit Japanese movie “Shitsurakuen.”
Shochiku is forecasting revenue of 51.6 billion yen ($412 million), down from its original projection of 55.2 billion yen. The company will not pay dividends to shareholders because of the expected loss, it said.
Shochiku shares dropped 45 yen in trading on the Tokyo Stock Exchange on Thursday to finish the day at 715 yen.
In mid January, Shochiku management staged a coup and ousted president Toru Okuyama and his son Kazuyoshi. Soon to be company president, executive VP Nobuyoshi Ohtani, a grandson of the company’s founder, accused the Okuyamas of being financially reckless.
Legit and films linchpins
New topper Ohtani said he wants to build the company on two traditional pillars: legit theater and movies. Legit accounts for 40% of Shochiku’s income, with Kabuki drama being one of the biggest money-earners for the company.
“We shall keep making movies but they will be judged more carefully on their financial and commercial merits,” an official familiar with policy being pursued by the new management said. “We will concentrate on a slimmed down line of stronger products.”