NTT DATA posts profit hike despite decline in net sales overseas

The Japanese group reported decreasing net sales for each overseas regional unit

Tokyo-based solutions provider NTT DATA shared soaring operating profits in its full year results despite dwindling net sales.

Net sales grew 7.8 per cent compared to September 2023, reaching ¥2.24t (£11.27bn) compared to ¥2.08 last year.

Operating profits went up a strong 22.3 per cent to ¥149b this fiscal year.

Japan carried the increase in sales this year, with a 7.8 per cent growth compared to last year, thanks to strong performance in all businesses, especially in the social & public infrastructure business.

But overseas, sales were slow due to a “downward trend”.

Sales did experience a 7.7 per cent climb thanks to the datacentre and SAP businesses, as well as global technology and solution services (GTSS), in addition to the positive impact of foreign exchange rates.

But NORAM, EMEA and LATAM were not to be outdone, as operating profit soared 38.9 per cent, reaching ¥47.5bn, thanks to an increase in NORAM and GTSS, the absence of structural transformation costs recorded in the previous fiscal year, and the impact of foreign exchange rates.

Operating profit increased 7.5 per cent in Japan.

The respectable hike is partly due to a 50.4 per cent quarterly operating profit spike the company saw earlier this year, off the back of EMEA and LATAM going up 136 per cent in net sales.

Looking ahead

This is far from enough for the solutions provider, as it declared being “on a cusp of a new chapter of transformation.”

To improve growth in the future, the Japanese solutions provider said it will look to consolidate, streamline, and modernise its portfolio with new services such as genAI, and accelerate innovation by globalising the assets and capabilities across its priority industries and offerings.

NTT DATA has already worked on its promises, and has been awarded deals in NORAM and APAC, and signed a multi-year partnership in Germany.

In Japan, the company said it will enhance profitability by selecting and focusing on highly profitable projects and limiting unprofitable businesses.