KDDI : Posted Performance Highlights and Q&A for the First Quarter of the Fiscal Year Ending March 2023

The Presentation of the Financial Results

At "Highlights of the Financial results" held following "Press conference about communication Failure," President Takahashi explained the consolidated performance in the first quarter of the fiscal year ending March 2023.

Consolidated performance in the first quarter

In 1Q, although we saw focus areas growing revenues, our consolidated performance saw increased income and decreased profit. Consolidated sales were 1.3517 trillion yen, up 4.0% year on year, and operating profit 296.9 billion yen, down 0.8% year on year. As for the performance of focus areas, the Business Services segment recorded sales of 258.6 billion yen, up 5.5% year on year, and operating profit 45.8 billion yen, up 2.6% year on year. Sales from our Finance Business were 64.6 billion yen and its operating profit 21.7 billion yen, partly due to temporary accouting effects.

For consolidated operating profit in 1Q, Multi-Brand communications ARPU revenues decreased by 29.2 billion yen, while group MVNO revenue and roaming revenue dropped slightly. Meanwhile profit increased by 15.2 billion yen thanks to focus areas being promoted such as Business Services segment, Finance Business and Energy Business. With the cost of terminating 3G and depreciation cost decreasing, the profit dropped by 2.3 billion yen in total.

Multi-brand IDs decreased quarter to quarter to 30.93 million but are steadily growing taking out the decrease of approximately 250,000 associated with terminating 3G at the end of March 2022. UQ mobile and povo are still being used by many customers, growing to a total of approximately 7 million. As for Multi-Brand communications ARPU was 3,970 yen, down 310 yen year on year but within the range projected, due to the increase of UQ mobile and povo customers.

For the Business Services segment which is a focus area, sales for the NEXT core revolving around DX grew to 87.0 billion yen, up 16% year on year, driving growth. Operating profit has grown in both the NEXT core and existing communication businesses steadily. Part of the reason was the increased profit of the NEXT core partly due to the effect of the currency rate at overseas subsidiaries, as well as the decreased revenue from cancellations from terminating 3G.

The Finance Business, which is a focus area, saw a significant growth of income partly due to the temporary effects from the change in accounting process for handling mortgage fees. The Energy Business saw decreased income in 1Q year on year. We have raised the proportion of private and stable procurement, controlling cost. Even though there are immediate effects from the soaring fuel prices, we will keep our eye on their effects on the performance.

Key indicators of focus areas are growing mainly in DX, Finance, and Energy. For DX-related indicators, sales for the NEXT core were 87.0 billion yen, up 16% year on year, and for finance-related indicators, the Transaction Volume of Settlement/Loan was 3.3 trillion yen, up 33% year on year, au Jibun Bank mortgage balance was 1.8 trillion yen, up 0.2 trillion yen year on year, and au PAY card members reached 7.9 million, up 1.2 million year on year. For energy-related indicators, the number of subscribers to services including au Denki etc, was 3.53 million, up 570,000 year on year.

Keeping in mind the communication failure we allowed to happen, we will enhance the structure to improve our communication quality to recover customers' trust and for the forthcoming 5G era, advancing our efforts for sustainable growth.