2023.3Q Financial Results : Key Points

In the three-month period ended June 30, 2023 (from April to June) and the three-month period ended September 30, 2023 (from July to September), operating profit decreased year-over-over as a result of prioritizing costs to streamline assets, primarily in the Regional Communications Business Segment, but as cost reductions have generated results, profits have been steadily improving each quarter, and for the three-month period ended December 31, 2023 (from October to December), profits shifted to a year-over-year increase.
For the three-month period ending March 31, 2024 (from January to March), we anticipate an increase in base profits resulting from the expansion of our growth areas and further cost reductions, as well as an increase in profits from streamlining non-core assets, and are aiming to achieve the fiscal year plan despite the difficult environment caused by disaster recovery costs and other factors.

The enterprise, smart life and consumer communications businesses each increased revenues year-over-year.
Segment operating profit increased by ¥13.5 billion year-over-year due to an increase in the enterprise business related to the increase in revenues and improved efficiency in sales measures in the consumer communications business, partially offset by a decrease in the smart life business as a result of accelerating growth investments.
Going forward, we will work to grow our business by realizing the benefits of our growth investments, and to improve company-wide cost efficiencies, and are aiming to achieve our fiscal year plan.

For the three-month period ended December 31, 2023 (from October to December), ARPU decreased by ¥100 year-over-year to ¥3,990 as a result of strategic price reductions aimed at strengthening our customer base, in addition to a post-COVID decrease in demand for voice phone calls.
In order to stop the decline in ARPU, we are working to increase our medium- and large-capacity users by bundling services with leading content, and are further advancing our upselling initiatives.

For the nine-month period ended December 31, 2023, segment operating profit decreased by ¥47.1 billion year-over-year due to the difficult environment for voice services traffic and the end of the COVID-era increase in fiber optic demand, in addition to an increase in costs for dispositions of unneeded assets as part of our asset streamlining, among other factors. For the three-month period ended December 31, 2023 (from October to December), the segment shifted to an increase in profits year-over-year as a result of an increase in SI revenues, in addition to the cost reduction effects generated by a change to in-company equipment maintenance, among other factors.
Going forward, we anticipate that disaster recovery costs will make it difficult to achieve our plan, but we will work to cover those costs to the fullest extent possible by streamlining non-core assets and by implementing steady cost reductions, among other measures.

Segment revenues increased year-over year as a result of increased revenues in Japan in the public, finance and enterprise fields, as well as an increase in revenues overseas as a result of strong sales in Europe and the effects of exchange rates, among other factors. Segment operating profit increased by ¥7.1 billion year-over-year due to increased profits resulting from increased revenues, in addition to the effects of structural reforms that have previously been implemented.
We continue to aim to achieve our fiscal year plan through increases in revenues from capturing digital demand and through the effects of structural reforms, among other initiatives.