NTT(US:NTTYY)2024-05-10 20:05Summary of Nippon Telegraph and Telephone Corporation (NTTYY) Earnings Conference Call Company Overview - Company: Nippon Telegraph and Telephone Corporation (NTTYY) - Fiscal Year Ended: March 31, 2024 - Fiscal Year Forecast: Ending March 31, 2025 - Date of Conference Call: May 10, 2024 Key Financial Results - Operating Revenue: Increased to ¥13,374.6 billion, a record high, despite a drop of ¥260 billion in electricity business revenue [6][7] - Operating Profit: Increased by ¥93.9 billion to ¥1,922.9 billion, driven by cost reductions and streamlining of non-core assets [7] - Profit: Increased by ¥66.4 billion year-on-year to ¥1,279.5 billion [7] - EBITDA: Increased by ¥127.9 billion year-on-year to ¥3,418.1 billion [7] - Earnings Per Share (EPS): Achieved ¥14.8, meeting the previous medium-term financial plan target [7] Segment Performance - Integrated ICT Business: Revenue and operating profit increased due to growth in Integrated Solutions and Enterprise Business [8] - Regional Communications Segment: Experienced negative impacts from disaster recovery costs but achieved revenue and income increases through cost reductions [8][11] - Global Solutions Business: Revenue and operating profit increased, driven by public sector and enterprise business growth in Japan [8][12] - Electricity Business: Revenue dropped due to increased procurement costs, leading to operating losses compared to the previous year [9] Fiscal Year 2024 Forecast - Operating Revenue: Expected to increase year-over-year, aiming for record levels despite a ¥130 billion negative impact from currency [10] - Operating Profit and EBITDA: Anticipated to decrease year-over-year, but positive when excluding one-time factors from the previous year [10] - Growth Strategy: Focus on evolving measures towards medium-term goals for fiscal 2027, with an aim to expand base profit [10][13] Strategic Initiatives - Streamlining Non-Core Assets: Achieved ¥200 billion in asset streamlining, with approximately ¥100 billion in profit from these sales [25][26] - Cost Structure Reforms: Plans to implement drastic cost structural reforms to increase EBITDA by 20% by fiscal 2027 compared to fiscal 2022 [13] - Data Center and Finance Business: Separate disclosures planned for these growth areas to enhance stakeholder assessment of enterprise value [14][15] Shareholder Returns - Dividends: Year-end dividend per share increased to ¥2.6, with annual dividends forecasted at ¥5.2, marking the 14th consecutive year of dividend increases [11] New Initiatives - NTT DOCOMO GLOBAL: A new company to manage and promote global business, focusing on application services and Open RAN implementation [16] - NTT Precision Medicine: Establishment aimed at integrating healthcare data for personalized medical care [17] - AI and Customer Experience: Appointment of Chief Customer Experience Officer and Chief AI Officers to enhance customer engagement and promote AI initiatives [18] Environmental Goals - Net-Zero Target: Aiming for net-zero emissions by 2040, with interim targets for 2030 [18] Market Dynamics - Data Center Business: Expected to grow at a CAGR exceeding 20%, with plans to establish a strong global presence [35][36] - Challenges: High interest rates impacting investment strategies and cost structures [38] Conclusion - NTT is focused on achieving long-term growth through strategic asset management, cost reductions, and expanding its presence in high-demand sectors such as data centers and integrated ICT services. The company remains committed to shareholder returns while navigating market challenges and pursuing innovative initiatives.