NTT Corp plans USD1.4bn share buyback

21 Feb 2018

Former monopoly fixed line operator Nippon Telegraph and Telephone Corporation (NTT Corp) has announced plans to buy back up to JPY150 billion (USD1.4 billion) of its own shares ‘to enhance investor returns’. Bloomberg reports that the telecoms giant and parent company of Japan’s largest mobile operator by subscribers NTT DOCOMO, intends to repurchase up to 31 million shares, equivalent to 1.57% of the total, in the roughly four month-period from 22 February to 30 June 2018. With NTT Corp shares having fallen by approximately 10% this year, the telco hopes the move will drive up returns as it struggles to maintain its profits amid rising competition in its home market. The group’s return of equity (ROE) was 9.5% for its fiscal third quarter ended 31 December 2017, below the 11.2% average on the Nikkei 225 stock exchange.

For the October-December 2017 period, NTT Corp sad operating revenues increased by 4.3% year-on-year to JPY8.72 trillion from JPY8.36 trillion, operating income edged up 0.1% to JPY1.32 trillion and net income rose 10.1% to JPY736.6 billion. NTT noted that growth was driven by its Long Distance and International Communications business, which contributed JPY1.63 trillion (up JPY61.3 billion) to group turnover and the Data Communications business segment, which generated JPY1.46 trillion (up JPY296.2 billion). Meanwhile, NTT DOCOMO was responsible for JPY3.60 trillion of total turnover and the group’s regional communications business segment for JPY2.38 trillion. EBITDA slipped to JPY2.50 billion from JPY2.52 billion; EBITDA margin was 28.7%, compared to 30.1%. Capital spending in the first nine months of NTT’s financial year was JPY1.14 trillion, compared to JPY1.09 trillion in the year-ago period, of which DOCOMO received JPY403.6 billion to help drive its ongoing LTE rollout programme, and regional units NTT East and NTT West around JPY331.7 billion – a large part of which is being committed to broadband and data projects.