NTT CFO Aims to Boost Market Cap by 20% in Two Years
(Bloomberg) -- Nippon Telegraph & Telephone Corp. should be able to exceed a market capitalization of 15 trillion yen ($132 billion) within two years, about 20% greater than it is right now, backed by improved profits and share buybacks, the carrier’s chief financial officer said.
Akira Shimada, who is also senior executive vice president of Japan’s largest telecommunications company, said in a recent interview that the valuation should “at least be at that” threshold. Additional buybacks may be in store, he added.
NTT’s targets follow a 4.25 trillion yen merger with wireless subsidiary NTT Docomo Inc. last year that turned it into a bigger company. At its current capitalization of $111 billion, the former national telecoms monopoly is Japan’s fifth largest business by value, and a higher valuation would put it on par with the likes of Sony Corp. and Keyence Corp. NTT unveiled in August a plan to buy back 250 billion yen worth of its own shares by March 2022.
Shimada also said that NTT would proactively consider issuing more green bonds, following the successful sale of 300 billion yen in green debt in October. The proceeds from the offering, the largest of its type in Japan thus far, will be spent on green projects including renewable energy and investments in fifth-generation wireless technology.
NTT shares are up more than 20% this year, following a 4% decline in 2020. NTT, which will release quarterly results Nov. 10, raised its target for per-share earnings to 370 yen from 320 yen for the fiscal year that will end in March 2024, and boosted its cost savings target to 1 trillion yen from 800 billion yen.
Shimada also said the partnership between Docomo and Mitsubishi UFJ Financial Group Inc., announced in May, to offer financial services to wireless customers may also include products such as home loans to customers.
“We have to introduce competitive products, otherwise there’s no point in doing this,” Shimada said.
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