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Japan's Nichii Gakkan spills 16bn yen in red ink

TOKYO -- Nichii Gakkan has posted a 16 billion yen ($149 million) group net loss for the fiscal year ended March 31 due to disappointing earnings from its nursing care and language learning businesses.

The red ink, reported Friday, dwarfs the company's forecast of a 3.5 billion yen loss. Nichii Gakkan had reported a 416 million yen net profit for fiscal 2014.

In the long-term-care business, clients decreased 3% from a year earlier in March on a lack of qualified caregivers. Last spring's cuts in government reimbursements also dragged on earnings. Operating profit for the segment shrank 40% to 6.7 billion yen.

For the language instruction business, the Coco Juku English-conversation schools logged a 5.7 billion yen operating loss. The chain, launched in 2012, failed to recruit enough students.

Overall sales inched up 1% to 273.5 billion yen, missing the forecast by 2 billion yen.

Owing to the dismal results in both operations, Nichii Gakkan booked 7.2 billion yen in extraordinary losses. The figure includes impairment losses on all 80 Coco Juku schools. The company also reduced deferred tax assets by 4.3 billion yen, adding to the net loss.

"We have become unable to offset losses from our language business with profits from both our long-term-care and medical support businesses," said Nobusuke Mori, a senior managing director.

(Nikkei)

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