Bloomberg News

DoCoMo Will Maintain Dividends Next Fiscal Year, CFO Says

November 22, 2012

DoCoMo to Maintain Dividends Next Fiscal Year

NTT DoCoMo Inc. expects operating profit of 820 billion yen ($9.96 billion) for the 12 months ending March, down 8.9 percent from its previous estimate of 900 billion yen, the company said last month. Photographer: Kiyoshi Ota/Bloomberg

NTT DoCoMo Inc. (9437), Japan’s largest mobile-phone company, plans to maintain dividends next fiscal year to lure investors as it lags behind competitors in adding subscribers.

“We will at least maintain dividends,” even as operating profit may not increase next fiscal year, Chief Financial Officer Kazuto Tsubouchi said in an interview in Tokyo yesterday. “Keeping the payouts is a high priority.”

The company, which lagged behind KDDI Corp. (9433) and Softbank Corp. (9984) in the number of subscribers added in October, cut its profit forecast last month to boost sales promotion spending. Starting this month, DoCoMo plans to introduce 11 new handsets that work on a faster network using Long Term Evolution technology in a bid to win back market share after its rivals began offering Apple Inc.’s iPhone 5 in September.

“Investors had fears that DoCoMo would cut its dividends next fiscal year because of an expected profit decline,” said Shinji Moriyuki, a Tokyo-based analyst at SMBC Nikko Securities Inc. in Tokyo. The CFO’s comments “are good enough” to ease such concern, he said.

DoCoMo rose 1.7 percent, the most since Oct. 16, to 118,100 yen at the close on the Tokyo Stock Exchange, paring this year’s decline to 17 percent. KDDI has gained 23 percent in the period and Softbank has advanced 38 percent.

The carrier, 63 percent owned by Nippon Telegraph & Telephone Corp. (9432), expects operating profit of 820 billion yen ($9.9 billion) for the 12 months ending March, 8.9 percent less than its previous estimate of 900 billion yen, the company said last month. That would be 6.2 percent lower than last fiscal year. Annual revenue may be 4.52 trillion yen, an increase from the 4.45 trillion yen forecast in July, DoCoMo said.

‘Ample Cash’

“We have ample cash, so we can pay our shareholders,” Tsubouchi said. The company, which hasn’t reduced dividends since it sold shares in 1998, plans to pay 6,000 yen a share this fiscal year, it said in October.

It may take two years for the company to be able to post 900 billion yen in operating profit, President Kaoru Kato told reporters Oct. 26.

Net income may increase 9.3 percent from a year earlier to 507 billion yen in the 12 months ending March 31, the Tokyo- based company said, lowering its previous forecast of 557 billion yen.

DoCoMo’s share of mobile-phone subscribers in Japan fell to 46.2 percent as of Oct. 31 from 50.3 percent three years earlier, according to data compiled by Bloomberg using company announcements. DoCoMo had a net gain of 7,200 subscribers last month, compared with gains of 238,800 at KDDI and 284,200 at Softbank.

DoCoMo forecasts subscriber additions will total 2 million this fiscal year, down from an earlier estimate of 2.8 million, it said last month. Additional promotional expenses for the year will probably total 80 billion yen, DoCoMo said.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Shunichi Ozasa in Tokyo at sozasa@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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