Accumulated losses at dentsu in Australia have passed half a billion dollars, according to the latest local financial statements of the subsidiary of the Japan-based advertising group.
Papers lodged with corporate regulator ASIC show the local dentsu company with a loss of $61 million for the year to December 2022, up from $23.6 million the year before.
Accumulated losses were $563.5 million.
However, net revenue for the year to December was up 8.3% to $275.75 million. The biggest expense was staff at $193 million.
Dentsu has written assurances of continuing financial support from its parent in Japan.
The operating financials are only for 2022, but were authorised February 2024 and include analysis from December 2023.
These show a loss of $85.58 million for the year to December 2023.
Forecasts to February 2025 indicate positive cash flow is expected.
The local entity also received an equity contribution of $145 million in December 2023.
“The group’s ability to continue as a going concern is dependent upon the financial support of its ultimate parent Dentsu Group Inc which has formally agreed to provide financial support to ensure the group is able to pay its debts as and when they fall due,” the directors of the local company write.
“In the opinion of the directors, the group remains a going concern.”
They write that all related party debts, and a significant portion of loans, have been repaid.
At December 2023, dentsu Australia had a net asset position of $164.96 million
Dentsu has been restructuring the local entity, rebuilding its core business in Australia, following negative growth numbers.
This has meant up to 100 redundancies, including dentsu Media CEO Danny Bass and Merkle chief executive Steve Yurisich.
Australia, according to a presentation to market analysts, was among a string of dentsu’s markets reporting less than -10% organic growth in the December quarter and for the full 2023 year.
The Australian numbers for the year to December 2022:
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.