NTT’s First Quarter Boosted by Currency Weakness and Some One-Offs

Narrow-moat-rated Nippon Telegraph and Telephone's, or NTT’s, first-quarter fiscal 2022 result (quarter ended June 2022) was in line with our expectations at an underlying level with revenue growth of 6.1% year on year, operating profit growth of 3.5% year on year, and net profit growth of 8.4% year on year. Management retained its fiscal 2022 guidance of 3.6% revenue growth, 2.9% operating income growth, and 0.8% net profit growth, with first-quarter growth rates clearly ahead of those, helped largely by a positive impact from JPY weakness worth JPY57 billion for the quarter (or 2% of revenue growth and around 12% of operating profit). From an operation perspective, the global solutions businesses—NTT DATA and NTT Ltd—were the main positives. Increased fuel prices also drove revenue in the retail electricity business, but this had little impact on profits. An increase in tax-deferred assets of around JPY 10 billion as a result of a tax credit associated with the past investment by NTT Ltd in Verio also helped the first-quarter result. Growth in the mobile business was hindered by price cuts.