FY2021.3Q Financial Results-Key Points

Last updated : February 7, 2022

FY2021.3Q revenues and income both increased. Operating revenues, operating income and profit each reached new record-high levels. Operating revenues increased by ¥185.2 billion (an increase of 2.1%) year-over-year to ¥8,923.2 billion, and operating income increased by ¥37.3 billion (an increase of 2.5%) year-over-year to ¥1,539.7 billion, due to an increase in SI revenues at NTT DATA as a result of capturing increased demand for digitalization and strong increases in optical services at NTT East and NTT West, among other factors. Profit increased by ¥199.2 billion (an increase of 24.0%) year-over-year to ¥1,030.3 billion, exceeding ¥1,000 billion for the first time since the company was privatized in 1985, due to the impact of including profit from the transaction to make NTT DOCOMO a wholly owned subsidiary and the increase in operating income, among other factors.
Reflecting strong business results, FY2021 forecasts have been revised upwards by ¥180.0 billion for operating revenues, by ¥15.0 billion for operating income, and by ¥15.0 billion for profit, and the EPS target has been revised to ¥306, an increase of ¥4. In addition, the overseas operating income margin forecast has been revised upwards by 0.1pt to 6.1%, and is progressing steadily towards achieving the target of 7% in FY2023.
The forecast for the FY2021 year-end dividend amount has been increased by ¥5 from the initial dividend forecast to ¥60, bringing the forecasted total annual dividend per share amount to ¥115 (an increase of ¥10 year-over-year) , enhancing shareholder returns.

For Q3, NTT DOCOMO had a decrease in income year-over-year. Please discuss the outlook for achieving the plan to increase income for the full fiscal year.

NTT DOCOMO has steadily improved its income in each quarter as a result of increases in income in the Smart Life area, primarily from its finance and settlement business, and increased sales cost efficiency. For Q3 on a standalone basis, income increased by ¥15.1 billion year-over-year, shifting to profitability. For Q4, we anticipate a significant increase in income due to a reduced cost burden associated with the investments to expand 5G in the same period of the previous fiscal year, in addition to a continued increase in income in the Smart Life area and cost reductions from DX, and we believe that it will be possible to achieve the plan for the full fiscal year.
We understand that NTT Ltd. will implement additional structural reforms and realize the effects of cost reductions, but, aside from cost reductions, please discuss the status of initiatives to increase sales.

Revenues from NTT Ltd.'s high-value-added services (“HVS”) have been steadily progressing, increasing by ¥52.3 billion year-over-year, and with its proportion of total revenues also increasing from 37% at the end of FY2020 to 43%, primarily based on data centers and managed services capturing increased demand from the acceleration of DX. In the future, we will accelerate initiatives to further increase sales, such as increasing the number of sales personnel who specialize in HVS and introducing new incentives.

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