KDDI Corp. said Tuesday profit fell by 30 percent in the first quarter compared with the same period a year ago, hurt by higher sales promotion costs and a loss caused by a writedown of assets.
The country’s second-largest telecommunications company by revenue after NTT DoCoMo Inc. posted a group net profit of 32.56 billion yen, down from 46.47 billion yen in the same quarter a year earlier, the Tokyo-based firm said.
Its revenue rose 14 percent to 830.63 billion yen from 725.73 billion yen, while group operating profit fell 27 percent to 39 billion yen from 53.7 billion yen a year earlier.
For the full fiscal year through March, KDDI booked a 5 percent drop in net profit to 190.6 billion yen despite rising sales. It predicted net income would fall again this year.
Net income for the full year ended March 31 declined to 190.6 billion yen, from 200.6 billion yen a year earlier. Sales climbed 4.8 percent to 3.06 trillion yen, from 2.92 trillion yen.
Profits were hurt by a 15.4 percent drop in net income at KDDI’s mobile phone division, which in turn was dragged down by poor performance at its older Tu-Ka mobile service.
The company also logged a one-time loss of 115.7 billion yen on a writedown of Tu-Ka equipment, it said.
Still, the results beat KDDI’s own full-year forecast from January, which predicted a full-year profit of 187 billion yen on revenue of 3.04 trillion yen.
Looking ahead, KDDI forecasts a 2.4 percent drop in net income to 186 billion yen for the business year through March 2007. Sales are seen increasing 7.6 percent to 3.29 trillion yen.
The company said one challenge in the current year will be keeping customers who switch from Tu-Ka service and signing them up for KDDI’s faster, next-generation mobile service.