I. Interim ResultsWhilst private consumption did see a mild recovery, Japan's economy during this interim period continued to stagnate without a clear sign towards a solid recovery, as seen from the fact that investments in new plant and equipment remained low and the employment situation still remaining bleak. In the field of telecommunications, amid intensified competition due to the entry of Nippon Telegraph and Telephone into international telecommunications markets following its split, KDD made steady efforts to stay ahead of its competitors by taking various measures including expansion of terrestrial optical fiber transmission networks and promotion of the GC connection, in addition to the inauguration of the JIH Cable in April this year. Under such a business environment, KDD's operating revenue in this interim period showed an increase of 47.2 % to 212 billion yen, as compared with the same period of the previous year. Of the total operating revenue, the revenue from the voice transmission increased 20.4 % to 141.2 billion yen as the result of a robust growth of the revenue from the domestic telephone service achieved by intensified sales activities and promotional efforts, although the revenue from the international telephone service that is the Company's mainstay suffered a decrease for the consecutive term due to sluggish growth of demand and the reduction in prices. In addition, the revenue from multimedia-related services (note) that is expected to be a pillar of revenue in the next generation showed a remarkable increase of 62.7 % against the same period of the previous year to 23.2 billion yen. Furthermore, the Company started in this term the network sales business, and a revenue of 30.9 billion yen was posted from sales of the capacity in the JIH Cable. The operating expenses increased 42.2 % to 203.4 billion yen as compared with the same period of the previous year, as a result of strengthening business related sectors, centering on the sales promotion expenses to gain a foothold in the domestic telephone market, despite continued managerial efforts to cut down costs through every possible measure such as personnel reduction and the merger, as well as the savings on access charges. Additionally, in connection with the petition under Chapter 11 of the Federal Bankruptcy Reform Act filed by the British company, ICO on August 27 this year, in which Satellite Phone Japan Ltd., KDD's consolidated subsidiary, has a stake, "reserve for loss from investment in affiliated company" was posted with respect to the subsidiary's shares amounting to 8.4 billion yen. All considered, the current interim period saw an increase in revenue and income, an increase in ordinary income by 118.5 % to 11.1 billion yen, and a decrease in net income by 46.8 % to 1.1 billion yen as compared with the same period of the previous year, respectively.
(Reference) Consolidated interim settlement The consolidated settlement (figures for reference) for the current interim period comprises 27 consolidated companies and 3 companies with equity earnings (losses). Consolidated sales amounted to 282.7 billion yen, ordinary income 11.7 billion yen, and current income 1.6 billion yen, respectively. With respect to the operating profit and loss by business, all of the telecommunications business, the communications facilities installation business, and other businesses earned profits.
II. Business Estimates1. Non-consolidated business estimates For the fiscal year ending in March 2000, while seeing revenue shaving factors such as reduction of charges for international and domestic telephone services, KDD expects to earn an operating revenue of 406 billion yen, an ordinary income of 12 billion yen, and a net income of 2.5 billion by dint of increase in revenues from expanded multimedia services, etc. 2. Consolidated Business Estimates As for the consolidated business estimates for the fiscal year ending in March 2000, taking account of the business results of interim settlement for consolidated companies as well as increase of sales in the latter period and other factors, this company estimates an operating revenue of 616 billion yen, an ordinary income of 11 billion yen, and a net income of 1 billion yen.
III. Future Management PolicyWhile continuing to strive toward expanding its share in the domestic telephone market as well as maintaining its revenues from the international telephone business, KDD will vigorously transform its business structure into one based on IP technology through various steps including construction of the KTH 21, and development of the IP-related business and services. In addition, to reinforce its competitive edge in the market KDD will actively continue to reform its management structure, taking stern action including further streamlining of the personnel .
1. Outline of the interim settlement for the fiscal year ending in March 2000
[Reference] Summary of consolidated interim settlement for the fiscal year ending in March 2000 and ratio of consolidated settlement to non-consolidated settlement
2. Business estimates for the fiscal year ending in March 2000
3. Consolidated business estimates for the fiscal year ending in March 2000
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46.8
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