NTT 6M sales and net income drop despite subscriber gains

6 Nov 2020

Japan’s Nippon Telegraph and Telephone Corporation (NTT) has published its financial results for the six months ended 30 September 2020 (6M FY2020/21), reporting a 3.0% year-on-year fall in operating revenue to JPY5.711 trillion (USD54.9 billion), down from JPY5.889 trillion in the corresponding period of FY2019/20. As in the first trimester, the Japanese carrier noted that continuing declining revenues from its ‘Mobile communications business’ (down JPY47.5 billion), ‘Regional communications business’ (down JPY6.5 billion), ‘Long-distance international communications’ (down JPY114.5 billion) and ‘Other business’ (down JPY15.2 billion) were only countered by minimal gains at its ‘Data communications’ (up JPY2.3 billion) segments.

In the period under review, NTT’s operating profit increased by 2.6% to JPY1.008 trillion from JPY982.805 billion, although net profit (attributable to NTT) fell to JPY541.511 billion, down 1.1% y-o-y from JPY547.670 billion reported at end-September 2019, which was itself down 2.2% y-o-y. Sales derived from overseas operations, meanwhile, dropped 7.3%, or USD720 million, to around USD9.1 billion. It did note though, that the group’s overseas operating income margin (including results from the global holding company, its subsidiaries and affiliates) continues to improve, and was up 0.7pp to 2.9%.

In operational terms, NTT’s fixed line subscriber base increased in 6M FY2020/21, as the company reported a total of 22.144 million FLET’S Hikari (including Hikari Collaboration Model) fixed broadband service users, up from 21.416 y-o-y, while ADSL subscribers decreased to 428,000 from 542,000 reported in September 2019. NTT also reported a small rise in the number of subscriptions for its video services, as Hikari TV and FLET’S TV users reached 4.828 million, up from 4.747 million a year earlier. Finally, the group’s regional units NTT East and NTT West reported a total of 14.618 million telephony subscribers at end-September 2020, down from 15.734 million a year earlier, and 18.592 million Hikari Denwa (VoIP) connections, up from 18.369 million.

For the full year FY2020/21, NTT is forecasting attributable net profit of JPY860 billion (up 0.5%), operating profit of JPY1.59 trillion (up 1.8%), and operating revenues of JPY11.50 trillion (down 3.4%).