November 23, 2001, 9:27 AM — Japanese telecommunication company Nippon Telegraph and Telephone Corp. (NTT) posted a consolidated net loss for the first half of its fiscal year of 261.8 billion yen (US$2.2 billion as of Sept. 30, the last day of the period being reported), the company said in a statement Thursday. By contrast, last year NTT reported a consolidated net profit of 175.3 billion yen for the same period a year ago.
The loss included write-downs of 498 billion yen related to U.S. Web-hosting provider Verio Inc., and 262.7 billion yen related to Dutch wireless provider KPN Mobile NV. In both cases the charges were due to a drop in the valuation of the companies since NTT acquired stakes. The company also suffered from intense price competition in its domestic fixed-line business.
Operating revenue for the first half year amounted to 5.81 trillion yen, an increase of 5.8 percent over the 5.49 trillion yen posted during the same period last year.
"Corporate values of overseas companies in which the NTT Group holds equity positions were re-evaluated in light of the recent changes in the business environment, such as the ongoing 'IT recession' and the slowdown in the U.S. economy, and current financial conditions," NTT said.
NTT's long-distance and Internet arm, NTT Communications, acquired Verio for $5.5 billion last year after a long delay caused by a U.S. government investigation of national security concerns.
NTT's wireless subsidiary, NTT DoCoMo Inc., acquired 15 percent of KPN Mobile in May 2000, paying 4.5 billion euros ($4.1 billion at the time) for the stake. KPN's share price, however, has dropped by some 90 percent in the meantime.
For the full fiscal year, which ends March 31, NTT is predicting 11.8 trillion yen in consolidated operating revenue, an increase of 3.5 percent over the previous year. The company is projecting a consolidated net loss for the year of 331 billion yen, due in part to an extraordinary loss of 183 billion yen related to the restructuring of its regional telecommunication subsidiaries NTT East and NTT West.