Revenue on track, operating efficiency initiatives boost expected ordinary and net profit
TOKYO, JAPAN TELECOM HOLDINGS CO., LTD. (TSE: 9434) today revised upward its non-consolidated financial forecasts for the full fiscal year 2002, ending 31 March 2003. JAPAN TELECOM HOLDINGS CO., LTD. ("JAPAN TELECOM Holdings") attributes the better-than-expected performance primarily due to sustained revenue growth and the results of operating efficiency improvement measures in its fixed-line business.
On a non-consolidated basis, JAPAN TELECOM Holdings now expects ordinary profit of 8 billion yen and net profit of 10 billion yen, an increase of 4.5 billion yen and 8 billion yen respectively on the original forecast. The revenue forecast remains on track for an encouraging performance for the full fiscal year 2002.bThe impact of these changes on the consolidated forecasts for ordinary profit of 183 billion yen, and for net profit of 48 billion yen, are not material and therefore the consolidated forecasts remain unchanged.
In addition to the effects of sustained revenue growth and improved operating efficiencies in the fixed-line business, the expected improvement in non-consolidated net profit is also attributable to a favourable tax rate resulting from the JAPAN TELECOM group reorganisation, which took effect on 1 August 2002. This will increase net profit by 4 billion yen in fiscal 2002.
Forecasts for JAPAN TELECOM Holdings' non-consolidated operating revenue, ordinary profit, and net profit were originally released on 28 May 2002. Those forecasts were based on the expected performance of JAPAN TELECOM CO., LTD. through to 31 July 2002 (during which period it was the operating company for the fixed-line and certain other businesses) and the expected performance of JAPAN TELECOM Holdings from 1 August 2002 through to the end of the fiscal year. The revised forecasts have been prepared on the same basis.
JAPAN TELECOM Holdings' President, William (Bill) Morrow, said, "We are pleased to report that our initiatives to improve the operating efficiency are benefiting the fixed-line business's bottom line quicker than we had expected, and these complement our solid revenue performance which is in line with our forecasts. We were particularly pleased with a strong showing in data revenue and a slightly better than expected performance in voice, both of which have contributed to our sustained revenue performance."
We will continue our efforts, with a view to bringing even greater efficiencies to the operation going forward in order to provide a focused quality service to our customers. In July 2002, we implemented a new customer-focused initiative, our 'passion for customers' campaign, and this has already resulted in new data orders that exceeded our original target," Morrow continued.
JAPAN TELECOM Holdings' revised and prior fiscal 2002 non-consolidated forecasts, and its unchanged consolidated forecasts, are as follows:
|9 August 2002
FY2002 revised forecast
|28 May 2002
FY2002 prior forecast
|28 May 2002
Notes to Editors
JAPAN TELECOM HOLDINGS CO., LTD.
With effect from 1 August 2002, JAPAN TELECOM CO., LTD., ("JAPAN TELECOM") implemented a new holding company structure under which JAPAN TELECOM was renamed JAPAN TELECOM HOLDINGS CO., LTD., ("JAPAN TELECOM Holdings") and operates its fixed-line, mobile and other businesses as separate, peer subsidiaries. JAPAN TELECOM created the holding company structure through the kaisha bunkatsu or corporate split procedure provided for under the Japanese Commercial Code.
The business lines operated by JAPAN TELECOM prior to 1 August 2002 have been transferred to three new wholly owned subsidiaries. JAPAN TELECOM CO., LTD. contains the core fixed-line business, Telecom Express Co., Ltd. contains the mobile sales agency business previously operated by JAPAN TELECOM and Japan System Solution Co., Ltd. contains the mobile billing system and other IT related functions which were previously operated by JAPAN TELECOM
J-PHONE CO., LTD., ("J-PHONE") JAPAN TELECOM's 45.08% owned wireless subsidiary, remains as a 45.08% held subsidiary of JAPAN TELECOM Holdings.
Haruo Murakami and William (Bill) Morrow serve as chairman and president, respectively, of both JAPAN TELECOM Holdings and JAPAN TELECOM. John Durkin, in addition to his role as chief financial officer of J-PHONE also serves as chief financial officer of JAPAN TELECOM Holdings.
For more information, please visit the JAPAN TELECOM Holdings site at www.vodafone-holdings.co.jp.
JAPAN TELECOM Group Structure:
JAPAN TELECOM started operations in 1986 as a carrier providing long-distance services throughout Japan. It provides voice and data transmission services to customers through approximately 10,000 km of fibre-optic networks throughout the country. In 1997, it merged with International Telecom Japan and began providing global network services as Japan's first carrier operating both domestically and internationally.
In 1998, JAPAN TELECOM announced the concept of Japan's first domestic nationwide IP backbone network. In addition to its leading role in the provision of IP services, the company is active in a wide range of operations in the telecommunications sector, from data centre operations to network solutions.
For more information, please visit the JAPAN TELECOM site at www.japan-telecom.co.jp
This press release contains certain forward-looking statements concerning JAPAN TELECOM Holdings' strategy and its expectations concerning its financial and operating results, in particular its targets for its fiscal 2002 performance forecasts (including non-consolidated operating revenue, ordinary profit, net profit and consolidated operating revenue, ordinary profit, net profit), as well as expectations for trends in the Japanese fixed-line and wireless telecommunications markets. By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to: changes in economic conditions that would adversely affect demand for JAPAN TELECOM Holdings' services; greater than anticipated competitive activity; slower customer growth or reduced customer retention; changes in projected growth rates in the telecommunications industry; the accuracy of and any changes in JAPAN TELECOM Holdings' projected revenue models; future revenue contributions of data services offered by JAPAN TELECOM Holdings; the impact on capital spending from investment in network capacity and the deployment of new technologies, including 3G technology; the possibility that technologies will not perform according to expectations or that vendors' performances will not meet JAPAN TELECOM Holdings' requirements; JAPAN TELECOM Holdings' ability to successfully introduce new services, in particular 3G services, and the delivery and performance of key products; the success of JAPAN TELECOM Holdings in achieving disposals of non-core assets, changes in the regulatory framework in which JAPAN TELECOM Holdings operates; and the impact of legal or other proceedings against JAPAN TELECOM Holdings or other companies in the telecommunications industry.
All written or verbal forward-looking statements attributable to JAPAN TELECOM Holdings or persons acting on its behalf made in this release or subsequent hereto are expressly qualified in their entirety by the factors referred to above.