I would like to explain about the financial results of the Q1 fiscal year ending March 2023. Here, the financial results highlights of the Q1 of the fiscal year ending in March 2023. The Q1 saw an increase in focus areas, but the consolidated results were an increase in revenues and a decrease in income from the top. The consolidated operating revenue was JPY 1.3517 trillion, up 4.0% YoY. The operating income was JPY 296.9 billion, down 0.8% YoY. The results of the focus areas. Business Services Segment revenue was JPY 258.6 billion, up 5.5% YoY, and its operating income was JPY 45.8 billion, YoY a 2.6% growth. Financial business revenue was JPY 64.6 billion, and its operating income was JPY 21.7 billion, due partly to a temporary accounting effect. Let me focus on factors for change in consolidated operating income.
From the left, a decrease in multi-brand communications ARPU. Revenue was JPY 29.2 billion, while revenue of group MVNO and roaming revenue saw a slight decrease. Promotion of the focus areas, including Business Services Segment and financial and energy businesses, contributed to an increase of JPY 15.2 billion in income. Other factors included 3G termination and a decrease in depreciation cost, which resulted in a decrease of JPY 2.3 billion in income in total. hows the number of multi-brand IDs under communications ARPU. The number of multi-brand IDs was 30.93 million, a decline QoQ. Excluding about a 0.25 million decline related to 3G termination at the end of March 2022, the number was expanding favorably. Many customers continue to use UQ mobile and povo. With two brands combined, the number of IDs increased to about 7 million.
It shows changes in the communications ARPU. Thanks to favorable results of UQ mobile and povo, ARPU was JPY 3,970, down JPY 310 YoY, it was within the estimates.
Next is our focus area, Business Services Segment. Operating revenue of the NEXT Core business, centering on DX, increased to JPY 87 billion, up 16% YoY, and is driving growth. Operating income in Business Services Segment is progressing well with both the NEXT Core business and the core business existing business increasing their profits. Factors for change were the increase in the NEXT Core business, including the impact of forex impact on the overseas subsidiaries, as well as the negative impact from contract cancellations due to 3G termination. Focus area is the financial and energy business. Financial business posted a large increase in profit, partly due to a one-time effect from a change in accounting treatment of mortgage fees. Energy business posted a YoY decrease in profit in the Q1 .
Cost is being controlled by increasing energy procurement through private power contracts. Given the impact from rising fuel prices, we will continuously monitor the earnings impact closely. Next is the main indicators of focus areas, which are growing, especially in DX, finance, and energy. In DX-related indicators, on the upper left, NEXT Core business revenue was JPY 87 billion, up 16% year-on-year. In finance indicators, upper row, transaction volume of settlement and loan was JPY 3.3 trillion, up 33% year-on-year. au Jibun Bank loan product balance was JPY 1.8 trillion, up JPY 200 billion year-on-year. In bottom row, the number of au PAY card members was 7.9 million, up by 1.2 million year-on-year. In energy-related indicators on the bottom right, the number of au Denki and other subscribers reached 3.53 million, up by 570,000 year-on-year. Lastly, summary of Q1 results.
In Q1, operating revenue increased and profit decreased despite higher profits in focus areas. The impact of communication charge reduction was mitigated mainly by promoting focused areas. Excluding the 3G termination impact, IDs increased steadily thanks to the strong performance of UQ mobile and povo. The main indicators and focus areas grew, especially those related to DX, finance, and energy. In light of the communication failure this time, we will strengthen our system to regain customer trust and improve communication quality in preparation for the 5G era and promote the initiatives towards sustainable growth. Thank you very much for your attention.
We would like to start the questions and unanswered session for the financial results of the Q1 of the fiscal year ending in March 2023 of KDDI. Thank you for joining us via internet out of your busy schedules. I am your MC today. My name is Hongou of IR department. Let me introduce today's participants. Executive Vice President, Executive Director of Corporate Sector, Muramoto. Executive Vice President, Director of Solution Business Sector, Mori. Executive Vice President, Director of Personal Business Sector, Amamiya. Senior Managing Executive Officer, Director of Technology Sector, Yoshimura. Executive Officer, General Manager of Corporate Management Division, Corporate Sector, Aketa. Today, business results-related materials, three items, presentation, planning, detailed materials. Two items for TSE-related disclosure. Five items are made available on the IR website regarding what's covered in the materials and performance we will share in the Q&A and subscriber targets.
Please check the disclaimer of each material. Now we would like to entertain your questions. The first question. Daiwa Securities, Ando-san, please unmute yourself. Raise a question, please.
Daiwa. Ando is my name. Thank you. I have two questions. First, net addition. 3G termination, if you could make adjustment 200,000, that's the net addition, I think. Churn rate is 0.92. Can you hear me?
Yes, we can hear you.
That's 0.92. Comparing these numbers, you were able to get good performance in net as a result. I suppose there are various factors behind. Your competitors changed the pricing. In addition to that, UQ had a strong performance, and the prices of those devices. I think there are various factors, but which factor contributed to the net addition? If you could share with us the orders of the influence, please let us know.
What would be the outlook for those factors going forward?
Ando-san, thank you. Q1 IDs related questions. As you said, -50,000 net decrease, but 3G churn was about 250,000, so QoQ, 0.2 million net addition. What are the factors of this good result? I think that was your question. Amamiya is in charge of personal business. Amamiya-san, please.
Well, you've already pointed them out. First, UQ was pretty strong. There was a discount price, like a support discount. On UQ, we are competitive in the market, and MNP, and for the new ones, they made a good contribution. On the other hand, other companies, they equated JPY 0 plan. Concerning those, since that timing, the tide was changed. MNP, the number has been pretty brisk. Concerning others, MNP has been doing well. It's not just Rakuten, Docomo, SoftBank. Against these carriers, our numbers have been relatively well. Good. Now, going forward, with this communication failure. We did have this as a stumbling block in July, but we will be trying hard to recover trust, and we would like to recover the business. That's what we want to do. Thank you.
Thank you very much. My second. In relation to energy business, there was a waterfall graph in the focus areas, JPY 15.2 billion, and business finance, when subtracting that, -JPY 3.8 billion versus previous year. Whether this is 100% energy or not, I don't really know, but it looks likely. Am I correct in my guess? In addition to that, Q2 onwards, concerning energy, regarding fuel adjustment cost increase, regarding this impact or burden, is it going to increase, or how much will it increase? What kind of image do you have? Your company's forecast, you haven't changed the forecast by your company. Are there any factors for change or consistency? Would you like to elaborate on that, please? Thank you.
Slide five, energy business. Q1 , as you said, YoY, the income decreased.
Regarding the detailed numbers, I would like to refrain from touching upon them, but as Ando-san mentioned, those are the numbers. Your numbers are not far away from what actually happened. As it says, compared with the previous term, we increased private power procurement. Compared with the previous year in terms of the unit, there have been changes, and in the Q1 , the income decreased. The fuel prices are now soaring, and the fuel adjustment cost, it might actually hit that ceiling. Regarding what's likely to happen going forward, I think that's what you asked. Amamiya is in charge of personal business. Pass the microphone to Amamiya.
On the Q1 , as you heard from Muramoto, we are trying to ensure the energy from private producer. We reflected on what happened. We wanted to lower the volatility, so we had more bilateral contracts, private power business.
Q1, we are controlling them appropriately. It's in the negative territory compared with the previous year, but the effect is limited, we believe. The fuel adjustment cost, from the Q2 , it's increasing. We anticipated that EnRes, among others. Utilizing EnRes, we would like to do this business. We would like to closely monitor what's going to happen. On a consolidated basis, we would like to control it. Our holdings, from July 1st, it started its operation, and we are trying to come up with creative ideas. Overall, we would like to have a firm control over the businesses. Thank you.
Thank you.
We will take the next question. Nomura Securities, Masuno-san, please. Please unmute yourself and ask the question.
This is Masuno from Nomura Securities. One by one. One is ARPU. This time, support discount impact is my question. In revenue or in ARPU, or the accumulative subscriber, how much was the impact? After, there are some who finished the six-month discount period. Are they staying in au, or are they in the natural churn? I think you have a good view on June and July, so if you could elaborate on this, please.
Yes, au support discount, six-month discount campaign. Customers joined with this campaign. Your question is what the impact is on our ARPU currently and in the future.
Amamiya-san, please.
Yes, this support discount just ended in May. It's not that we are seeing a big impact at this present. In July and August, and in the H2 , we will probably see a bigger impact. Regarding ARPU, in the Q1 , JPY 3,970.
This is in line with our projection. For the Q1 , UQ and povo, ID increase was big. In terms of telecommunication revenue, it is secured. ARPU may appear a bit low, but overall, we are trending forward strongly. Thank you. That's all.
If we look at the support discount alone for ARPU, how much? Or a few hundreds of millions of JPY, or billions of JPY. What was the result in April, June quarter?
On a year-on-year basis, a few dozens of Yen. That is the impact of support discount on ARPU in the Q1 .
This is the peak in Q2 and Q3 year-on-year will be down gradually. Is that the right assumption?
Yes. Yes, you're right.
Understood. My second question is, in the communication failure briefing, this was touched upon.
Regarding the failure, the corporate customer, I think, you are still holding back on sales for the corporate customers, but your proposals or the deals that are under negotiation, you will add BCP measures to continue your negotiation with corporate customers, I think. As you normalize, how long will it take for you to normalize your sales activities? In the earlier briefing, you talked about network mesh. You said you will revisit, review the network mesh, which means you need a CapEx other than building capacity. Or will this be covered with software? The impact when you change from the mesh structure. Thank you very much.
Thank you for the two questions related to communication failure. First is from Mori-san in charge of corporate clients.
Let me first talk about the corporate client sales activities normalization.
Right after the failure occurred, about one week, we mainly visited corporate clients apologizing what happened. This is continuing, but gradually, we are making new proposals, including BCPs. This is increasing. We are visiting more customers than usual and finding new things. There are new discoveries. We hope to continue this. In terms of the normalization of our sales activities, including our apologies, we are working hard to visit and do sales activity that is close to a normal level.
Regarding our capital expenditure policy, Yoshimura-san, please.
First of all, revisiting the mesh structure, it does not mean we immediately need the capacity building. Software can address this. But for the entire capital expenditure, we will work with a validation committee where external experts serve as a member. This will be discussed in the committee, to decide on the final CapEx. As mentioned, just because we review mesh does not mean that we need to add capacity or add facility. I asked about the normalization of the individual side users.
Yes, there was a big impact at the time of failure. The users who visited au shops gave us some very strong words. We take them seriously to first establish solid measures to prevent the recurrence. The visit declined at one point, but now it's settled. It seems like we're in a gradual decline. My Number card application started at the end of this month. We want to give momentum to the market. We just had a briefing on communication failure today and also submitted a report to MIC. From next week, we will bring our activity back to normal. We think we can do this rather quickly.
Thank you very much. Thank you.
We would like to entertain the next question. SMBC Nikko Securities, Kikuchi-san. Please tap unmute icon. Ask a question, please.
Kikuchi speaking. Thank you. Two questions, please. Regarding the corporate, could you elaborate on that, please? Regarding individual, the impact by this failure was not that significant. Now on corporate, I think there are different views, positive factors, negative factors. Positive factors, various countermeasures. Because no matter which carrier you use, it will be the same, so it's possible that you will have more opportunities to utilize what you have. On the negative side, by user using other carriers, are you going to suffer decreased revenues, or are there other options? Do you see some specific pros and cons, negative factors and positive factors?
Thank you for your questions. Mori-san, who's in charge of corporate business.
Well, positive and negative factors. Regarding positive factors, positive sides, from the viewpoint of BCP, for instance, multi-carriers having redundancy, trying to have redundancy. Well, even before that, cellular network and non-cellular, for instance, OTT voice service. OTT voice service, for instance, LINE or Cisco, Webex calling by Cisco, those are available services. On fixed line and mobile, combining them both once again and with one same number, receiving calls, I think that's going to increase as well. With these, even more than before, combining many things, different things, we could make proposals. That's the positive side. Negative side. To make sure that the negative side would not become significant, we would like to keep making efforts, but it will be the other side of the coin.
Those customers who are just using our network with this multi-carrier, if it's positive, that would be okay, but switching to some other carriers for some of the usage, I think that could also happen. We would like to minimize the impact from those and OTT and other options included. The having redundancy in the BCP and making proposals to that direction is what we should really focus on.
Thank you. Second question. Financial business, some questions for clarification. Significant increase, one of the factors, this accounting process effect. Other than that accounting effect, I think you still enjoy increasing income. What contributed to that increase in income? Financial group, in addition to that. Financial group, recurring profit, ordinary income, IFRS operating incomes difference from them from the last Q4 , I think the difference widened. In the Q1 , what's the difference? That's my second question. Thank you.
Well, this time, show the slide, please. Left-hand side. Home mortgage loan, the fee income Accounting-wise, it was treated differently from the previous year. The fee income last year for 13 years, it was deferred before it's listed as income. In the past two years, the liquidation of the receivables, we have accumulated experience, and this is listed en bloc. The past ones, about JPY 17 billion in worth for the past, that's listed as the temporary income. IFRS and JGAAP difference. Aketa-san, would you like to address this?
Right. Compared with JGAAP and IFRS, especially in the Q1 , there is a significant difference, as Muramoto explained it to you. That's significant. Based on the JGAAP, it's one time for mortgage loans. When it's done, fee income was listed. Under the IFRS, it's deferred. The deferred portion, including the past ones, just like JGAAP. When loan was dispersed, it's recognized as revenue. This time, the past portions were handled, and that's significantly reflected.
Right. Accounting effects that contributed to the increase in income. In your policy, I think this is the focus area. Excluding accounting effects, where can you expect to see the growth in the Q2 and onwards? What's your outlook?
If I could just give you some additional information. Excluding temporary effects, Q1 financial business is concerned YoY, based on IFRS, slight decrease, but almost the same as before. In terms of the actual operation indicators, especially the JIBUN Bank loan, the outstanding balance YoY increase of 15%. It's a very brisk business. Concerning credit cards, 1.2 million increase YoY. That's the membership increase of credit cards. In terms of operation, we believe that there's momentum, there's good growth.
In the Q1 , slightly, the income was not that robust. Interest rate cost for mortgage loans and also from sales promotion cost, those have some impact. Overall, these are the drivers, two are the drivers, and we believe that we can enjoy good growth. Thank you.
Time is almost up. I would like to take the last question. Mitsubishi UFJ Morgan Stanley Securities, Tanaka-san, please unmute yourself and ask your question. Thank you.
Hello, this is Tanaka speaking. I have one question. Multi-brand value-added ARPU growth is stronger than I thought. Could you give us the breakdown here, and the sustainability going forward? Thank you.
Thank you. Value-added ARPU. Personal, Amamiya-san, please.
Yes. Value-added ARPU is growing. It is growing in general. Financial settlements, au PAY and credit cards are growing. In contents, Netflix, we have bundled contents with Netflix, and that is growing. In others, electricity is also growing. Also, the compensation is also growing, repair and compensation.
What is the ARPU for electricity?
That is not disclosed. I'm sorry. I see. Just for clarification, in finance, au Financial, this is loan, other revenue is included. It's not included.
Thank you very much. We will now close the financial results briefing for the Q1 fiscal year ending March 2023. Thank you very much for your-