Internet Initiative Japan Inc. (IIJI), a provider of internet connectivity and network solutions, late Monday reported a 6.7% increase in profit for the first quarter from last year, helped by foreign exchange gains in addition to lower interest expenses and narrower losses on write-down of investments as compared to the year-ago period. Revenue for the quarter declined 3%.
Looking ahead, the company reiterated its earnings and revenue outlook for the first half of 2009 and the full year.
The Tokyo, Japan-based Internet Initiative Japan, or IIJ, said that net income for the first quarter attributable to the company increased to 180.48 million yen, or US$1.87 million, from 169.08 million yen in the previous-year quarter.
Net income attributable to IIJ per share for the first quarter was 891.06 yen, or US$9.24, compared to 818.39 yen in the year-ago quarter. Net income attributable to IIJ per ADS for the quarter was 2.23 yen, or US$0.02, up from 2.05 yen in the same period last year.
Total revenues for the quarter declined 3% to 15.84 billion yen, or US$164.22 million, from 16.33 billion yen in the prior-year quarter.
The company stated that while recurring revenues for the quarter increased 6.4% from last year and accounted for 87.7% of revenue for the latest quarter, revenue from systems construction declined due to weak IT related investments in Japan.
Koichi Suzuki, president and chief executive officer commented, "In an economic environment that continues to remain challenging, our operating income was above our original target largely because operating income from connectivity and outsourcing service and SI increased along with the increase in recurring revenues and the continuous tight cost control, while operating loss related to our ATM operation business increased as it is still in its course of business start up."
Connectivity and outsourcing services revenues for the quarter increased 8.7% from the year-ago period to 9.13 billion yen. Systems integration revenues declined 14.6% from the prior-year period to 6.56 billion yen and revenues from equipment sales dropped 42.6% to 136.58 million yen. Total costs and expenses for the quarter were 15.48 billion yen, or US$160.59 million, down from 15.92 billion yen in the previous year.
Operating income for the quarter declined 14.7% to 350.88 million yen, or US$3.64 million, from 411.26 million yen in the year-ago period, due to increase in the operating loss related to the company's new ATM operation business of 165 million yen year-over-year. Meanwhile, operating income from connectivity and outsourcing service and SI increased 21.9% to 584 million yen.
Interest expense for the latest quarter was 87.02 million yen, down from 106.20 million yen in the year-ago period. The company recorded foreign exchange gains of 9.66 million yen in the quarter, compared to foreign exchange losses of 2.40 million yen in the prior-year period.
Losses on write-down of other investments for the quarter were 1.50 million yen, compared to losses on write-downs of 7.39 million yen in the same period last year. Other income rose to 22.13 million yen from 6.35 million yen a year ago. Total other expense for the quarter declined to 51.02 million yen from 101.69 million yen in the previous-year quarter.
The company's balance of total assets as of June 30, 2009 was 50.67 billion yen, a decrease of 1.63 billion yen from the balance as of March 31, 2008.
IIJ noted that there were price pressures which are common in the beginning of the fiscal year, with corporate trying to reduce their running cost. Looking ahead, the company said it believes price pressures will increase in the following quarters, especially because corporate needs for cost reduction are a following wind toward the company's outsourcing services.
IIJ also expects security related services such as SMX service or anti-DDoS service to grow because companies must prevent their network from getting attacked. Needs for reliable and stable connectivity services also remain strong, the company added.
IIJ said it was preparing the launch of cloud computing related services and additional features for its services such as IIJ Mobile service, email related services and VPN services.
For the first half of fiscal 2010, IIJ reiterated its outlook for net income attributable to the company of 300 million yen and revenue of 33.50 billion yen.
Further ahead, for the full year, the company also reaffirmed its outlook for net income attributable to the company of 1.70 billion yen and revenues of 73 billion yen. IIJI closed Monday's regular trading on the Nasdaq at $4.95, down $0.04 or 0.80% on a volume of 18,100 shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.