Tuesday, May 13, 2008

Japan's Nippon Telegraph and Telephone (NTT) posts profit

Japan’s largest telecom company Nippon Telegraph and Telephone Corporation (NTT) observed a rise in its operating profit in the last fiscal year but forecasted an 11.1% decline in the current year. The company made a profit of more than 300 billion yen on pension fund operations. It will not be repeated this year. This is the first rise in the company’s profit in the last four years. Forbes reports:

But the telecom giant forecast an 11.1 percent decline in operating profit for the current year, after it booked more than 300 billion yen in one-off capital gains in the year to March 2008. The gains, which were made on pension funds that it previously managed on behalf of the government, will not be repeated this year.

The company said operating profit stood at 1.3 trillion yen ($ 12.6 billion), up from 1.11 trillion yen a year earlier.

Net profit grew 31.9 percent to 635.2 billion yen, the first rise in three fiscal years.

Revenue dipped 0.7 percent to 10.68 trillion yen.

NTT’s mobile phone unit NTT DoCoMo Inc. (TYO:9437) also recovered after observing decline for three years. The company lowered its sales costs and used various cost-cutting efforts. In November, NTTDoCoMo introduced its new ‘Value Course’ service, which cut the basic monthly charge to 1,050 yen per month from 1,890 yen. This new service also reduced DoCoMo’s sales promotion incentives to handset sales agents. The company is now selling handsets at installments. For the current fiscal year, NTT is expecting a profit of 500 billion yen.

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