Japanese television company, Tokyo Broadcasting System, has blamed sluggish advertising for a 50% drop in interim pre-tax profits and says its full-year results will be lower than expected.

The figures do not bode well for TBS's battle against the predations of internet upstart Rakuten, which has so far notched up a 19% stake in the broadcaster [WAMN: 28-Oct-05].

Rakuten will seize on the advertising slump as proof that TBS needs to change its current business model and will press for it to accept its merger offer. It has warned that ad revenues are likely to slide further as TV over the internet grows.

TBS has so far refused to negotiate with Rakuten and press reports say it will only consider a cooperation deal.

In the six months to September, TBS's pre-tax recurring profits fell to ¥5.67bn ($47.6m; €40.7m; £27.7m)) from ¥11.34bn in the same period last year, when its ad revenues were boosted by the Athens Olympics. However, net profits were up 64% to ¥12.57bn because of a one-off stock sale.

TBS says full-year revenues will be 19% lower than previously forecast, at ¥14.5bn, while net profits will be 9% lower at ¥17.7bn.

Data sourced from Financial Times Online and reuters.com; additional content by WARC staff