KDDI’s net profit slipped 4.5% in the year to March, amid continued weak demand for fixed-line services and higher than expected handset sales costs.
Japan's No. 2 cellco reported net income of 212.76 billion yen ($2.26 billion) for the full year, down from 222.74 billion yen a year earlier on 1.6% lower sales of 3.44 trillion yen.
The company last week cut its earnings guidance from 225 billion yen to 212.5 billion yen due to higher than expected mobile handset sales and a 61 billion yen fixed-line extraordinary loss.
Fixed-line operating losses increased from 43.1 billion yen in fiscal 2008 to 68.4 billion yen in fiscal 2009, with revenues dipping 1.1% to 839.2 billion.
Mobile operating profit fell 3.5% to 483.7 billion on higher sales agent commissions and network-related costs.
On the bright side, KDDI’s free cash flow of 230 billion yen was in the black for the first time in four years.
Lower sales commissions helped the firm book a small 118 million yen profit in the March quarter, compared with a 31.19 billion net loss a year ago.
KDDI expects its fiscal 2010 net profit to rise 12.8%. It plans to spend 10 billion yen on returning the fixed-line business to profitability.
It also expects to sell 10.6 million handsets in fiscal 2010, up from 10.2 million in fiscal 2009.