Mitsubishi Estate Co. said Tuesday it anticipates a consolidated net loss of 72.5 billion yen in the business year through March, a reversal from an earlier forecast profit of 20.5 billion yen, as it will write off latent losses on real estate holdings.
To remove the latent losses from its balance sheet, Mitsubishi Estate will combine a land revaluation rule and valuation losses on land and building holdings, which will result in an extraordinary loss of 157.9 billion yen, the real estate company said.
The rule allows a company to book latent gains on real estate based on their market value and register them on the asset side of its balance sheet after subtracting estimated taxes related to the transaction.
Mitsubishi Estate will also book a loss of 4.5 billion yen for inventory valuation.
The combined extraordinary loss of 162.4 billion yen will force Mitsubishi Estate into the red this year, it said.
Mitsubishi Estate forecast a consolidated pretax profit of 44 billion yen on group sales of 631 billion yen, down from the respective figures of 45 billion yen and 641 billion yen in its earlier projection.
On a parent company basis, Mitsubishi Estate revised its earnings forecast for 2001 to a net loss of 76.5 billion yen from a profit of 14.5 billion yen and to sales of 380.5 billion yen from 382 billion yen while keeping its pretax profit outlook unchanged at 30 billion yen.