Interim Settlement and Business Estimates
for the Fiscal Year Ending in March 1998
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Interim Settlement and Business Estimates for the Fiscal Year Ending in March 1998 |
| [1998-011] | November 12, 1998 |
1. Interim Settlement
Japan's economy during this interim period met with very severe conditions such as the slow-down of personal consumption and the accelerated reduction in capital investment, coupled with the persistent concern about the financial crisis. Meanwhile, in the overseas scene, the aggravation of the economic situation triggered by the monetary and financial unrest in Asia and Russia has spread on a world-wide scale, and a sense of uncertainty about their own business has been pervaded in Europe and the U.S. as well.
The state of affairs in economy so severe at home and abroad affected the demand for communication services, and as a result the use of KDD's international telephone traffic showed a decrease of 4.7%, compared with the same period of the previous year.
The operating revenue (sales amount) decreased 5.8 %, to 144 billion yen, compared with the same period of the previous year. Of the total operating revenue, the revenue from the voice transmission (note 1), though the domestic telephone services by dialing 001 were launched during the period, and the sale of Super World Cards, that are prepaid cards for domestic and international telephone services was boosted, fell 8.7 % to 117.2 billion yen against the same period of the previous year, affected by the decline in the unit charge collected due to the expanded use of discount services, and the decrease of the account received due to the reduction in international accounting rates. On the other hand, the revenue from multimedia-related services (note 2) that is expected to be a pillar of revenue in the next generation went up 11.5 % to 12 billion yen, compared with the same period of the previous year.
The operating expenses decreased 3.3 % to 143 billion yen against the same period of the previous year, by dint of further increase of operating efficiency through various measures including the cut-off of personnel.
As the result, the current interim period saw a decrease in revenue and income, a decrease of ordinary income by 44.9 % to 5.1 billion yen, and of the net income by 52.4 % to 2.1 billion yen, respectively, compared with the same period of the previous year.
Note 1: With the revision of the category of service in the Telecommunications Business Law, telephone services, ISDN services and Inmarsat Maritime services are categorized as "voice transmission".
Note 2: Revenue from multimedia-related services: this shows the total of revenues from the Internet, ATM, frame relay, high-speed leased circuits, etc.
2. Business Estimates
A some 4 % decrease in the use of international telephone services is expected for the fiscal year ending in March, 1999.
As for business estimates, it is expected to earn an operating revenue of 329 billion yen, an ordinary income of 9 billion yen, and a net income of 5 billion yen, respectively, taking account of certain factors including the synergy due to the merger with Teleway Corporation scheduled for December 1.
II. Revision of Consolidated Business Estimates
The consolidated business estimates for the fiscal year ending in March, 1999 were revised to an operating revenue of 405 billion yen, an ordinary income of 6.5 billion yen, and a net income of 1 billion yen, respectively, taking account of the interim settlement and the revision of business estimates of this company for the current fiscal year, as well as the merger with Teleway Corporation.
III. Future Management Policy
KDD will be striving for making a "comprehensive global communications company" by constructing a highly-reliable and low-cost network through the consolidation of fiber optic networks extended both at home and abroad, providing versatile domestic and international seamless services at low prices, and aggressively deploying business activities overseas. In addition, KDD will continue to increase operating efficiency, and cope with quickly and attentively the change in business environment including intensified competition.
[Outline of the interim settlement for the fiscal year ending in March, 1999]
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[Business estimates for the fiscal year ending in March 1999]
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[Revision to Consolidated Business Estimates for the fiscal year ending in March, 1999]
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5.8