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» NTT DoCoMo's CEO Discusses F1Q 2012 Results - Earnings Call Transcript
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» NTT DoCoMo CEO Discusses F3Q2011 Results - Earnings Call Transcript
» NTT DoCoMo, Inc. F3Q10 (Qtr End 12/31/09) Earnings Call Transcript
For today’s meeting, we have four sets of documents: one, earning release; number two, the results presentation slides; number three, the presentation slide for the medium term vision 2015; and fourth, the press release entitled “DoCoMo Releases Medium Term Vision 2015Shaping a Smart Life.” First of all, we would like to have a presentation from Mr. Yamada, President and CEO, followed by a Q&A session. We would aim to finish this meeting at 6:00 according to our previous announcement, but because we have this announcement of that medium-term vision, we would like to extend the meeting up to 6:30. Regarding the potential risk regarding the – of our business, please take a look at our slide and also Form 20-F filed with the U.S. SEC. Now without further ado, I would like to give the microphone to Mr. Yamada. Ryuji Yamada (Interpreted) I am Yamada of NTT DoCoMo. Thank you very much indeed for taking part in this meeting despite your busy schedule. I would also like to take this opportunity to express my gratitude to your continuous support to NTT DoCoMo. Today, we would like to present the results for the first six months of the fiscal year ending March 2012 and also the medium-term vision 2015 which we just recently developed. I know you are very busy and it’s quite bulky, so I would like to extend the meeting by 30 minutes compared to the initial plan. Now without further ado, I would like to start immediately with the presentation on the results for the first half of fiscal 2011. If you can go straight to page three of the presentation, these are the highlights of the results for the first half of fiscal 2011. As you can see here, in the first quarter – first half we sold a total of 3.63 million units of smartphones which is much higher compared to 2.52 million units for the full year of last fiscal year. And due to this brisk smartphone sales, the second quarter ARPU for the three months’ period increased by ¥150 year-on-year. As a result, the second quarter operating revenues increased by ¥16.8 billion year-on-year.
And also, if the impact from the loyalty point and handset repair system revision was excluded, it’s right here, if those are excluded which had an impact of ¥55 billion in reality. If those impacts were excluded, the second quarter operating income increased by ¥32 billion according to our view compared to the last fiscal year.In the second quarter of last fiscal year, we reviewed our point program and also the handset repair system by optimizing the period in which we offer the repair service. As a consequence, we were able to reduce the allowances by ¥55 billion in the second quarter of last fiscal year. So, I want you to understand that in order for us to precisely understand the business trends, whether it is going upwards or downwards, in order to have a correct understanding on the major trends, I think it is much better for us to exclude this ¥55 billion impact and compile the results without that impact because that more accurately reflects the current situation. And when that impact is excluded, we believe the second quarter operating income effectively posted an increase. And I think this growth trend is expected to continue in the third and fourth quarters. So, in light of these first half results, we have decided to make an upward revision to the full-year forecast, specifically, operating revenues was revised upwards by ¥10 billion, and it is expected to reach ¥4,240 trillion for the full year. Operating income expected to reach ¥870 billion, up ¥20 billion compared to the initial plan. And our smartphone sales is expected to reach 8.5 million units, up 2.5 million units compared to the initial plan. And packet ARPU is expected to reach ¥170 – is expected to record a ¥170 increase year-on-year, up ¥30 compared to the initial plan, excluding the impact of the monthly support discount.
Slide number four, this is the results in summary. As you can see here, on the red part, we have recorded a decrease of revenues and income. However, if the impact of the loyalty points system revision and the handset repair system change was excluded, we have incurred an increase effectively. And the progress to full-year forecast was 58.4%, which was almost in line with our earlier expectations.Slide number five, this is the results for the second quarter, the three months period from July to September. When the impact of the system change was excluded, the operating revenues increased by ¥16.8 billion compared to the same period of last fiscal year and operating income posted an increase of ¥4.8 billion. I guess this trend of recording income increase in both revenues and income are likely to continue towards the full year. And that’s the reason why we have decided to make an upward revision to our full-year forecast. Slide number six. Now, let me explain the details behind the changes in operating income compared to the first half of last fiscal year. Again, in order to give you a precise understanding on the business trends, we would like to explain, excluding the impact on the system change of the loyalty points system and their handset repair system. Actually, voice revenues decreased by ¥96.1 billion but packet revenues on the other hand increased by ¥69.5 billion. So, the reduction of voice revenues is still larger compared to the packet revenues increase. So, we haven’t been able to make up for the losses completely yet, but the GAAP has narrowed quite significantly. Other revenues also increased by ¥5.4 billion because of the increase of the number of mobile phone protection and delivery service subscriptions and the credit revenues increase, and other equipment sales revenues decreased by ¥4 billion.
On the other hand, the expense side, operating expenses posted an increase of ¥10.1 – equipment sales expenses increased by ¥10.1 billion. The cost of equipment procurement decreased by ¥3 billion, but on the other hand, because we increased the sales of crossy and smartphones, distributor commissions increased by ¥13.1 billion. So, altogether, if you subtract ¥3 billion from ¥13 billion, as a consequence, the operating – excuse me, equipment sales revenues increased by ¥10.1 billion.Read the rest of this transcript for free on seekingalpha.com