NTT Corp first-quarter revenues dip 5.1%, profits down 2.8%

11 Aug 2020

Japan’s Nippon Telegraph and Telephone Corporation (NTT) has published its financial results for the three months ended 30 June 2020 (Q1 FY2020/21), reporting a 5.1% year-on-year fall in operating revenue to JPY2.766 trillion (USD26.1 billion), down from JPY2.915 trillion in the corresponding period of FY2019/20. The Japanese carrier noted that continuing declining revenues from its ‘Mobile communications business’ (down JPY61.1 billion), ‘Regional communications business’ (down JPY10.2 billion) and ‘Long-distance international communications’ (down JPY68.6 billion) were only offset by gains at its ‘Data communications’ (up JPY3.7 billion) and ‘Other business’ (up JPY18.4 billion) segments. In the period under review, NTT’s operating profit decreased by 1.5% to JPY497.586 billion from JPY505.194 billion, while net profit (attributable to NTT) fell to JPY272.638 billion, down 2.8% y-o-y from JPY280.530 billion reported at end-June 2019, which was itself down 3.2% y-o-y. Sales derived from overseas operations, meanwhile, dropped 8.0%, or USD380 million, to around USD4.4 billion from JPY4.8 billion in Q1 FY2019/20. It did note though, that the group’s overseas operating income margin (including results from the global holding company, its subsidiaries and affiliates) improved by 0.6pp to 2.2%.

In operational terms, NTT’s fixed line subscriber base increased in Q1 FY2020/21, as the company reported a total of 21.923 million FLET’S Hikari (including Hikari Collaboration Model) fixed broadband service users, equivalent to 663,000 net additions in twelve months, while ADSL subscribers decreased to 455,000 from 570,000 reported in June 2019. NTT also reported marginal growth in the number of subscriptions for its video services, as Hikari TV and FLET’S TV users increased to a total of 4.811 million, up from 4.735 million a year earlier; going forward, the company estimates that the number will reach 5.032 million by end-March 2021. Finally, the group’s regional units NTT East and NTT West reported a total of 14.878 million telephony subscribers at end-June, down from 16.048 million a year earlier, and 18.542 million Hikari Denwa (VoIP) connections, up from 18.286 million.

For the full year FY2020/21, NTT forecasts that ‘the impact of COVID-19 is expected to be a decrease in Operating Revenues of approximately JPY350.0 billion and a decrease in Operating Income of approximately JPY70.0 billion’, based on the assumption that economic activity gradually recovers following the lifting of the state of emergency in May and that Japan’s rebound is likely to be slower than in other regions, particularly in Europe and the US.