Department store operator Isetan Co said Friday the company and its subsidiaries will incur a net loss of 2.5bn yen ($22m) in the current business year ending March 31, against the previous year's profit of 3,216m yen ($29,000).

The annual net loss estimate mirrors latent losses on shareholdings as well as a write-off of retirement payment reserve shortfalls, conducted in the April-September first half, the company said.

But the group expects to generate a recurring profit of 19bn yen ($171m), an 87.3 per cent jump from the previous year. It would be a new record high, surpassing the previous record of 18.6bn yen ($167m) scored in the year to March 1991, Isetan said.

Consolidated sales were estimated at 580bn yen ($5.2bn), up 1.2 per cent, the first year-on-year increase in four years.

While sales fail to grow sharply, the Isetan group aims to push up gross profit through cost-cutting efforts.

Amid an overall sluggish trend in the nation's department store sales, Isetan's flagship Shinjuku outlet in central Tokyo will chalk up a 0.3 per cent year-on-year rise, it said.

In the first half to September, the company reported a consolidated net loss of 12,378m yen ($111,333), a recurring profit of 7,595m yen ($68,313), and sales of 272,407m yen ($2.4m).

Isetan did not announce its first-half group earnings results a year before.