Summary 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.
Nippon Telegraph and Telephone Corporation (NTTYY) Financial Results for the Fiscal Year Ended March 31, 2024 and Financial Forecast for the Fiscal Year Ending March 31, 2025 Earnings Call Transcript