KDDI Q1 Profit Rises 9% YoY

According to Bloomberg, KDDI announced their first-quarter profit rose 9 percent with net income climbing to 82.5 billion yen ($682 million), or 18,483 yen a share, in the three months ended June 30, from 75.6 billion yen, or 17,296 yen, a year earlier. Operating profit, or sales minus the cost of goods sold and administrative expenses, climbed 16 percent to 140.9 billion yen.

Monthly average revenue per user in the quarter fell 5.6 percent from a year earlier to 6,430 yen because of a drop in voice calls. Average user revenue for calls declined 10 percent from a year earlier, KDDI said. The company spent an average of 35,000 yen subsidizing each handset in the three-month period, a decline from 38,000 yen a year earlier. Subsidy costs totaled 124 billion yen, unchanged from the year before.

KDDI kept its forecast for net income at the mobile-phone business to rise 21 percent to 253 billion yen this year. The unit’s first-quarter net income rose 13 percent to 88.2 billion yen, while sales climbed 5.5 percent to 674.8 billion yen. The operating margin at the business expanded to 22.4 percent from 20.3 percent a year earlier, helped by the reduced handset subsidies.

Last week, KDDI said it will cut monthly fees by 50 percent for customers who sign up for at least two years, after smaller rival Softbank added more users in May and June. The discount will reduce KDDI’s sales this year by 20 billion yen, which has been reflected in earnings forecasts, Makoto Takahashi, associate senior vice president, said July 19.