Rakuten Group Inc.’s credit rating was cut by Japan Credit Rating Agency Ltd., citing uncertainty about the outlook for profitability at the mobile phone business.

The assessor downgraded its view by a notch to A- and said the outlook was negative for billionaire Hiroshi Mikitani’s company, which has racked up four consecutive years of losses.

Several of Rakuten’s bonds have fallen to levels typically considered distressed, while its shares have dropped 17% this year, according to Bloomberg-compiled data.

“Earnings improvement in the mobile business has been slow, and it will be difficult for this business on its own to move into the black in terms of operating income in a single month during 2023,” the ratings agency said. “The improvement in the performance of the mobile business is expected to take more time than JCR had previously assumed.”

A spokesperson for the Tokyo-based company declined to comment on JCR’s downgrade.

Founded in 1997 by Harvard Business School graduate Mikitani, Rakuten is a competitor to Amazon.com Inc. in Japan, with more than 40 million active customers in units ranging from online shopping to banking and insurance.

But its debt load increased after it decided in 2017 to enter Japan’s mobile carrier market — a year when its fortunes were flying high after starting a now-ended sponsorship deal with FC Barcelona.

The company’s adjusted net debt has climbed 3.5 times to 2.1 trillion yen ($14.8 billion) in a little over five years as of the end of March, according to calculations by Bloomberg Intelligence.

Rakuten’s $5 billion pile of notes maturing in the next two years is the most of any Japanese corporate after SoftBank Group Corp, according to data compiled by Bloomberg.

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