Japan Post books $4.7b writedown on Toll and flags 1700 job cuts at the business

According to a Reuters report today , Japan Post Holdings has confirmed 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.

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.

“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.”

Source – Reuters

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