Internet Initiative Japan Inc. (IIJI), a provider of internet connectivity and network solutions, reported Thursday a decline in fourth-quarter profit, citing the drop in one-time revenue from systems construction. The company also provided revenue guidance for the first half and fiscal 2010.
The Tokyo, Japan-based company's net income for the fourth quarter declined to 1.06 billion yen, or US$10.74 million, from 1.09 billion yen in the previous year.
Net income per share was 5.26 thousand yen, or US$53.03 per share, compared to 5.27 thousand yen per share in the earlier year. Net income per ADS equivalent was 13.18 yen, or US$0.13 per share, in comparison with 13.15 yen per share last year.
The company said during the recent quarter, it recorded deferred tax benefit of 335 million yen, compared to a deferred tax expense of 137 million yen in the prior year.
Total revenues for the quarter grew 2.5% to 18.94 billion yen, or US$191.04 million, from 18.49 billion yen in the earlier year. The company stated that its one-time revenue from systems construction was heavily affected by the lack of IT related investments.
Koichi Suzuki, president and chief executive officer commented, "However, amid the tough economic situation, our recurring revenues which accounted for 77.5% of our total revenues for FY2008 continued its steady growth."
Connectivity and outsourcing services revenues increased to 9.13 billion yen, or US$92.13 million, from 8.45 billion yen in the prior year. Systems integration revenues were 9.54 billion yen, or US$96.24 million, compared to 9.80 billion yen in the year-ago quarter. Revenues from Equipment sales increased to 258.78 million yen, or US$2.61 million, from 234.24 million yen last year.
Total costs and expenses rose to 17.87 billion yen, or US$180.22 million, from 16.68 billion yen in the previous year.
For the full year, the company posted net income of 1.42 billion yen, or US$14.31 million, compared to net income of 5.18 billion yen in the prior year. Total yearly revenues increased to 69.73 billion yen, or US$703.28 million, from 66.83 billion yen in the preceding year.
The company's balance of total assets as of March 31, 2009 was 52.30 billion yen, a decrease of 3.40 billion from the balance as of March 31, 2008.
Looking ahead to the first half of fiscal 2010, Internet Initiative expects net income attributable to the company of 300 million yen and revenues of 33.5 billion yen.
Further, for the full fiscal year, the company expects net income attributable to the company of 1.7 billion yen and revenues of 73 billion yen.
The company targets cash dividend of 2 thousand yen per share of common stock for fiscal 2009.
"However, in the first half of the year, especially the first quarter, we estimate that our profit will be weak because the operating loss related to 4 new subsidiaries is expected to be larger in 1Q09 while revenues tend to be the weakest in the first quarter," added Koichi Suzuki.
IIJI closed Thursday's regular trading at $3.84 on the Nasdaq.
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