OREANDA-NEWS. Dentsu Inc. convened a meeting of its Board of Directors at its Head Office in Tokyo at which it finalized its consolidated and non-consolidated financial results for the three months ended June 30, 2014 (April 1-June 30, 2014).

Although there was a backlash against the consumption tax hike during the first quarter of the fiscal year ending March 31, 2015, the Japanese economy maintained its gradual recovery thanks to factors such as an increase in capital investment against a background of improved corporate earnings as well as higher wages and better employment opportunities. Meanwhile, although the U.S. economy is making steady progress, the global economy remained uncertain due to concerns about the economic slowdown in emerging economies and continuing political unrest.

Under such circumstances, although Dentsu's non-consolidated net sales in Japan were in the minus column for April year on year due to factors including the impact of the consumption tax rate increase, they returned to the plus column in May and registered a gain of 4.2% in June thanks in part to the 2014 FIFA World Cup Brazil(tm). Moreover, the acquisition of new clients and other positive factors in markets outside of Japan allowed Dentsu Aegis Network to record close-to-double-digit organic gross profit growth of 9.6% year on year. By geographic region, the year-on-year growth was 10.6% in EMEA, 4.7% in the Americas and 14.8% in APAC.

As a result, for the three months ended June 30, 2014, the Dentsu Group posted consolidated billings (net sales) of 538,256 million yen, an increase of 4.7% compared with the same period of the previous fiscal year; gross profit of 134,916 million yen, an increase of 9.8%; and operating income before amortization of goodwill and other intangible assets of 12,062 million yen, an increase of 20.2%.

From a seasonal perspective, the consolidated billings and gross profit for the first quarter tend to be lower than those for the other three quarters, and since the amounts assigned to goodwill and other intangible assets are amortized in equal proportions each quarter, for the first quarter the Group posted operating loss of 153 million yen (operating loss of 717 million yen was posted for the same period of the previous fiscal year); ordinary income of 3,463 million yen, an increase of 138.8%; and net loss of 735 million yen (net loss of 3,698 million yen was posted for the same period of the previous fiscal year). Operating income before amortization of goodwill and other intangible assets comprises the operating income figure to which has been added the amortization of goodwill incurred through acquisitions (including the acquisition of Aegis) and other intangible assets.