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Goodwill Group triples estimated loss

July 25 2008

The Goodwill Group Inc., a Tokyo-based firm with staffing and other operations, increased its estimated net loss to 30.00 billion yen (US$282.8 million) from 9.00 billion yen (US$84.9 million) for its last fiscal year. Final results for the fiscal year ending June 30 haven't been released.

The announcement follows news that the company is shutting its Goodwill Inc. temporary staffing subsidiary, which supplies day laborers in Japan, by the end of this month. Three internal employees were arrested and the company itself faces charges over the illegal dispatch of staff, according to news reports.

Earlier this year, operations at 737 of its staffing offices were temporarily suspended by the government over alleged violations of Japanese law over worker referrals.

In its revised fiscal year earnings estimates released this week, Goodwill said the decrease in projected net income stems from a 15 billion yen loss from discontinued operations at its Goodwill Inc. The closure will also add impairment and related losses of 2 billion yen.

In addition, the company said it will owe 1 billion yen in additional income taxes based on a government tax examination. The company said it believes it filed the appropriate tax returns, but acknowledged "there is room for improvement" and filed an amended return. Also, there was a reversal of deferred tax assets of 3 billion yen because of the closure of the Goodwill Inc. subsidiary.

The company's estimated revenue of 580.00 billion yen (US$5.47 billion) is unchanged.

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