Dentsu announces 8 per cent profit fall

Dentsu has reported an 8 per cent drop in its nine-month operating profits as higher sales were cancelled out by increased costs.

Although the group posted profits of almost £199 million for the period April to December last year, the figure was down from the previous year because of higher personnel and operating costs.

Dentsu said the ad industry in Japan remained stable overall on the back of a recovering economy and that it was on course to meet analysts' predictions of significant full-year operating profit rises.

These figures come as the Japanese economy gains momentum after several years in the doldrums. Estimates suggest it grew three times faster than the US's and Europe's markets in the fourth quarter as companies and consumers increased spending.

Dentsu cited aggressive sales efforts as the reason for the rise in operating costs, while the increase in employee costs reflected its investment in human resources.

The group, which wants to cash in on what it said were "favourable business conditions" in the internet ad market, announced in November it was in talks with five TV broadcasters to set up an internet-TV joint venture.