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Fumio IwasakiGood afternoon, I am Iwasaki. Kazunori Yamamoto We also have Executive Vice President responsible for consumer marketing, Mr. Takashi Tanaka. We also have Executive Vice President, Managing Director of Corporate Training and Strategy Department, Mr. Kazuhiro Yoshizawa. And also we have Managing Director of the Accounts and Finance Department, Mr. Hirotaka Sato. Hirotaka Sato Good afternoon to you, I’m Sato. Kazunori Yamamoto, Senior Vice President and Managing Director-Investor Relations For today’s meeting, we’ll be using two sets of documents which I think are already at your hand. We have the earning release and also the presentation slides for the results of the first quarter. At the outset, we will like to ask Mr. Kaoru Kato to deliver a presentation regarding the results for the first quarter, followed by a Q&A session. And we will aim to finish this meeting in about one hour at 6:00. Please also be advised that, regarding the risks containing forward-looking statements, please look at page one of the presentation slides. Now without further ado, I would like to hand the microphone to Mr. Kato begin the presentation. Kaoru Kato Good afternoon to you all, I am Kato of NTT DOCOMO. Thank you very much for attending this meeting despite your busy schedule. Before starting the presentation regarding the results for the first quarter, I will like to make a few comments. Two days ago, on the 25th of July, regarding the settings of sp-mode service with – in relation to this function, a certain accident was reported which inconvenienced our customers quite significantly. I would like to take this opportunity to express my deepest apologies for the trouble. Currently, we have found out who – which customer was actually affected by this trouble and we are individually contacting these customers in order to regain their confidence. In the meantime, we are also trying to identify the cause and prevent recurrence of the problem.
Now I will like to start our presentation regarding the results for the first three months of the fiscal year ending March 2013. We will go immediately to page three of the presentation. Regarding the highlights, operating revenues was ¥1.0723 trillion, which reported an increase of 2.4% or ¥25 billion year-on-year. Operating income was ¥262.6 billion, down 1.9% or ¥5.1 billion year-on-year. Although operating income reported a slight decline year-on-year, operating revenues achieved a steadfast increase and we believe the results were quite favorable toward our target to achieve ¥900 billion in operating income for the full year.Regarding net income for the first quarter, we achieved ¥164.3 billion, 3.5% increase or ¥5.6 billion increase compared to the previous fiscal year. Packet revenues increased by 9% to ¥485.1 billion; total handsets sales increased by 11.2% year-on-year to 5.17 million units. In particular, smartphone sales doubled almost compared to the last fiscal year to 2.49 million units. And in the month of July we’ve recorded sales of more than 1 million units. So as of today, for the first four months, we achieved close to 3.5 million units of smartphone sales. Total Xi subscriptions reached 3.32 million as of yesterday. Slide number four. In addition to the numbers that I just mentioned, please look at the progress to full year forecast. Operating revenues, 24% compared to the full-year target and operating income 29.2% compared to the full-year target. At the bottom, free cash flow, we reported a decrease of ¥30 billion because during first quarter of last fiscal year we didn’t report a dip because – partly due to the earthquake of March 2011. Sales was slack last year for the month of March last year; therefore, we didn’t have to pay so much commissions last fiscal year and also that delayed capital expenditures. So that is the reason why we have seen a reduction in free cash flows this fiscal year.
Now, slide number five, these are the changes behind the – factors behind the changes in operating income. The orange part represents the revenue part and the green part represents the expenses. Voice revenues decreased by ¥41.2 billion due to the expanded uptake of value plan and billable MOU. Voice revenues decreased by ¥41.2 billion excluding the impacts of monthly support. Packet revenues increased by ¥46.1 billion due to the brisk sales of smartphones and (inaudible) devices.Monthly support impact was ¥28.3 billion. This had a negative impact of ¥28.3 billion. Other revenues increased due to the subscriptions growth to mobile phone protection delivery service and increase of revenues from subsidiaries that we reported a ¥12.8 billion increase in other revenues. And equipment sales revenues increased by ¥35.7 billion. Read the rest of this transcript for free on seekingalpha.com