Japan-based KDDI downgraded its profit forecast for the fiscal year ending 31 March, predicting a 6.3 per cent decline due its subsidiary in Myanmar booking a provision of 18 JPY105 billion ($686.8 million).
In a statement, the operator explained due to forex regulations imposed by the Myanmar central bank in April 2022, collection of lease receivables has been delayed.
The operator also recorded a JPY25 billion provision for removal of underutilised telecoms equipment.
Its local subsidiary KDDI Summit Global Myanmar (KSGM), launched in 2014 with investment company Sumitomo, operates a joint venture with state-owned MPT.
KDDI cut its net profit target for fiscal 2024 by JPY45 billion to JPY635 billion. It booked a net profit of JPY677.5 billion in fiscal 2023. Due to the provisions, operating income is expected to come in at JPY130 billion lower than previously forecast, falling to JPY950 billion.
The operator stated its Myanmar unit has been subject to restrictions on the collection of lease receivables denominated in US dollars, warning in January its operating results could be impacted.
KDDI did not give an update the future of its local subsidiary. In the January statement the operator said KSGM continues to operate a joint venture with MPT, explaining it recognises the contribution it can make by remaining in Myanmar.
