Performance Analysis

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

Operating Revenue

The decline in handset sales revenue was offset by an increase in total ARPA revenue, MVNO revenue, and the consolidation impact of ENERES and Jibun Bank, as well as Business Services segment revenue. As a result, operating revenue grew 3.1% year on year to ¥5,237.2 billion.

Operating Income

Higher income in the growth fi elds of Life Design Domain and Business Services segment offset the decline in income brought about mainly by temporary factors that reduced profit in the first half, impairment losses focused on COVID-19, and costs expended for sustainable growth. As a result, operating income rose 1.1% to ¥1,025.2 billion.
Furthermore, both the Life Design Domain and the Business Services segment saw income increase more than 20% year on year.

Profit for the Year Attributable to Owners of the Parent

Profit for the year attributable to owners of the parent increased 3.6% year on year to ¥639.8 billion, reflecting growth in operating income and a decline in non-controlling interests, despite an increase in income tax due to increase in profit before income tax.

Dividends per Share

KDDI distributed an annual dividend of ¥115 per share, an increase of ¥10 compared with the previous year, for a consolidated dividend payout ratio of 41.7%—achieving an increase in dividends for the 18th consecutive fiscal year.

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

Total Assets

Total assets were ¥9,580.1 billion, an increase of ¥2,249.7 billion from the previous fiscal year-end. The increase reflects greater assets in the financial business after making Jibun Bank a subsidiary, increased right-of-use assets in accordance with the adoption of IFRS No. 16, and growth in receivables due to the diversification of installment sales methods for au mobile phone handsets.

Total Equity

Total equity was ¥4,859.1 billion, up ¥246.2 billion, mainly due to an increase in retained earnings associated with the increase in profit and an increase in non-controlling interests, which outweighed the transfer of capital surplus from retained earnings and cancellation of treasury stock in May 2019.

Interest-Bearing Debt

Interest-bearing debt expanded ¥404.7 billion year on year to ¥1,680.4 billion, mainly because of the adoption of IFRS No. 16 and an increase from the issuance of bonds.

D/E Ratio

The D/E ratio rose 0.08 of a point to 0.38 times as equity attributable to owner s of the parent increased along with the increase in retained earnings, but interest-bearing debt also grew following the adoption of IFRS No. 16.

Analysis of Capital Expenditures and Cash Flows

Capital Expenditures (Payment Basis)

Consolidated capital expenditures increased ¥13.3 billion compared with the fiscal year ended March 31, 2019, to ¥615.1 billion.

In the mobile business, capital expenditures were down ¥2.7 billion to ¥374.5 billion, mainly because investments for UQ WiMAX and 3.5GHz band have come full circle as we have completed their establishment plans, although we moved up investments for 800MHz and 700MHz and 5G.

In the fi xed-line businesses and others, capital expenditures increased ¥16.0 billion year on year to ¥240.6 billion. Despite a decrease in FTTH-related investment, spending on investments rose mainly for building and upgrading network facilities.

Cash Flows

Free cash flows amounted to ¥712.4 billion, up ¥397.4 billion from the previous fiscal year due mainly to a decrease in au handset inventory and a smaller increase in receivables from installment sales in addition to an increase in revenue after making Jibun Bank a subsidiary and higher EBITDA following the adoption of IFRS No. 16.
Net cash provided by operating activities was ¥1,323.4 billion, ¥293.7 billion more than in the previous fiscal year. The increase mainly reflects an increase in trade and other receivables and the effects of adopting IFRS No. 16, despite increased outflows from the financial business.

Meanwhile, net cash used in investing activities was ¥611.0 billion, ¥103.6 billion lower than in the previous fiscal year. The decrease mainly reflects an increase in proceeds from acquiring control of subsidiaries and an increase in proceeds from the financial business, despite an increase in outflows due to acquiring shares of affiliates and an expansion in capital expenditures.

  • As of March 2020
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