Financial Data and Key Metrics Changes - Operating revenue increased by ¥129 billion to ¥3.240 trillion, driven by gains in the Integrated ICT Business and Global Solutions Business, with a positive foreign exchange impact of approximately ¥80 billion [3][4] - Operating profit decreased by ¥38.8 billion to ¥435.8 billion due to a drop in telecommunication service revenue and costs related to customer base reinforcement and disaster recovery [4] - Profit decreased by ¥101.6 billion to ¥274.1 billion, reflecting the decline in operating profit and a rebound from last year's share sales [4] - EBITDA decreased by ¥23.1 billion year-on-year to ¥815.3 billion due to the drop in operating profit [4] Business Segment Data and Key Metrics Changes - Integrated ICT Business segment saw growth in finance payment and Smart Life business, but overall operating profit decreased due to increased costs [5] - Regional Communications segment experienced declines in both operating revenue and profit due to reduced network revenue and costs associated with asset removal and disaster recovery [5][6] - Global Solutions Business segment reported increased operating revenue driven by public sector finance and enterprise sector growth, while operating profit remained flat [6] Market Data and Key Metrics Changes - The company is focusing on reinforcing customer base and improving network quality to counteract declines in telecommunication service revenue [4] - The establishment of NTT AI-CIX aims to promote linked AI across businesses and industries, addressing social issues like labor shortages [8] - The renewable energy business anticipates achieving a forecast of 8 billion kilowatt-hours per year by 2030, following the acquisition of Green Power Investment [11] Company Strategy and Development Direction - The company plans to conduct a share buyback of up to ¥200 billion to enhance capital efficiency and shareholder returns [7] - Emphasis on cost reduction and operational efficiency improvements across various segments, particularly in the Regional Communications segment [5][6] - The company is pursuing a medium-term management strategy with a focus on expanding enterprise business and reinforcing customer base [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment, particularly in the consumer side of the Integrated ICT Business, and emphasized the need for improved sales reinforcement [39][40] - Future quarters are expected to show a reduction in the negative impact from PSTN migration, with efforts to control the impact throughout fiscal year 2024 [22][23] - Management remains committed to achieving the annual profit plan despite current challenges in mobile service revenue and ARPU [25] Other Important Information - The number of shareholders increased by 2.5 times to 2.26 million since the stock split announcement, indicating a diverse age composition among shareholders [12] - The company is expanding its data center operations domestically, with strong demand anticipated for DX and cloud services [42] Q&A Session Summary Question: Cost transformation in Regional Communication Business - Management outlined four pillars for cost transformation: improving operational efficiency, simplifying service delivery, enhancing facility utilization, and reducing outsourcing costs [16][17][18][19] Question: Impact of PSTN migration on revenue - Management confirmed that while there will be a decline in operating profit due to PSTN migration, the impact is expected to lessen in future quarters [22][23] Question: Benefits of wholly owning DOCOMO - Management noted positive effects in enterprise business and customer bundling since acquiring DOCOMO, although immediate changes in consumer telecommunications are not yet evident [28][29] Question: Data center business and interest expenses - Management acknowledged the increasing interest expenses due to expanding the data center business but emphasized efforts to manage and suppress these costs [31][33] Question: Outlook for Urban Solutions group - Management indicated that while profits may slightly drop this year, strong performance in condominium sales and leasing is expected to help achieve annual plans [46] Question: Share buyback flexibility - Management stated that additional share buybacks would depend on market conditions and volatility, emphasizing a commitment to shareholder returns [48] Question: Integration of NTT East and West - Management discussed potential benefits of integration, including improved operational efficiency and consistent service offerings across Japan [57]
NTT(NTTYY) - 2025 Q1 - Earnings Call Transcript