Performance Analysis

Analysis of Consolidated Statement of Income (Years ended March 31)

Operating Revenue

In the Personal Services segment, mobile communications revenues increased, along with sales for services in the life design business such as "au Denki" and "au WALLET Market." In the Value Services segment, value-added ARPA revenues increased, along with a boost to sales from the consolidation of Jupiter Shop Channel Co., Ltd. As a result, consolidated operating revenue rose 6.3% year on year to ¥4,748.3 billion.

Operating Income

Consolidated operating income rose 9.7% year on year to ¥913.0 billion. In addition to increases in mobile communications revenues and value-added ARPA revenues, the impact of a reduction in handset procurement cost and other effects absorbed impairment losses on certain idle assets related to 3G services and increases in outsourcing expenses, among others.

Profit for the Year Attributable to Owners of the Parent

The higher consolidated operating income absorbed an increase in profit for the year attributable to non-controlling interests and other non-operating losses due to the liquidation of certain unprofitable overseas operations. As a result, profit for the year attributable to owners of the parent rose 10.5% year on year to ¥546.7 billion.

Dividends per Share

We awarded full-year dividends per share of ¥85, up ¥15 year on year, amounting to a consolidated dividend payout ratio of 38.3%. Our dividend policy is to maintain the consolidated dividend payout ratio at a level above 35% while taking into consideration the investments necessary to achieve growth and ensure stable business operations, and we plan to continue raising dividends through synergy between a higher consolidated dividend payout ratio and increasing earnings per share in line with higher operating income.

Analysis of Consolidated Statement of Financial Position (Years ended March 31)

Total Assets

Total assets were ¥6,263.8 billion, an increase of ¥383.2 billion from the previous fiscal year-end despite a decrease in property, plant and equipment. The increase reflects an increase in assets associated with the consolidation of BIGLOBE Inc. and others, as well as expansion of the "au WALLET" credit card business and an increase in installment sales receivables of au mobile phone handsets.

Total Equity

Total equity was ¥3,849.1 billion, up ¥302.3 billion, mainly due to an increase in retained earnings associated with the increase in profit, which outweighed a decline in capital surplus due to the cancellation of treasury stock.

Interest-Bearing Debt

Interest-bearing debt decreased ¥83.6 billion year on year to ¥1,151.6 billion, mainly because of our efforts to repay borrowings and bonds payable.

D/E Ratio

Equity attributable to owners of the parent increased in line with the decrease in interest-bearing debt and increase in retained earnings. As a result, the D/E ratio declined 0.05 of a point from the previous fiscal year to 0.32 times.

Analysis of Capital Expenditures and Cash Flows

Capital Expenditures (Payment Basis)

Consolidated capital expenditures decreased ¥12.1 billion compared with the fiscal year ended March 31, 2016 to ¥519.4 billion.

Capital expenditures in the mobile business were down ¥13.0 billion to ¥325.0 billion, mostly due to a decline in investment in expanding service areas after the population coverage ratio of the 4G LTE (800 MHz) area surpassed 99%. This was despite the continued execution of investment primarily in wireless base stations and new and expanded switching equipment to address increasing data traffic.

In the fixed-line business, capital expenditures remained level year on year at ¥194.3 billion. This was the result of continued spending on the expansion of fixed-line communications networks to handle the increase in mobile and other data traffic, as well as continued investment related to FTTH facilities.

Cash Flows

Net cash provided by operating activities was ¥1,161.1 billion, ¥276.5 billion more than the previous fiscal year. The increase mainly reflects increases in EBITDA and in trade and other payables.

Net cash used in investing activities was ¥637.2 billion, ¥30.7 billion less than in the previous fiscal year. The decrease mainly reflects decreases in capital expenditures and acquisitions of control over subsidiaries.

As a result, free cash flows―the total of operating and investing cash flows―amounted to ¥523.8 billion, up ¥307.2 billion from the previous fiscal year.

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