Goo Hyun-mo Successfully Led 탈통신 Drive

Non-telecom Sales Exceed 42% Share
'Record-breaking' 300 Billion KRW Treasury Stock Acquisition
KT Enterprise to Diversify B2B Business

[Asia Economy Reporter Koo Chae-eun] KT CEO Koo Hyun-mo, who emphasizes 'de-telecommunication,' secured a solid performance in the third quarter. Thanks to the strong performance in the B2B (business-to-business) sector, which CEO Koo highlighted as his top priority upon taking office, the proportion of non-telecommunication sales rose to the 42% range. Although operating profit and sales were sluggish due to the spread of COVID-19 and the resolution of wage collective bargaining, the robust performance of KT's 'core business' offset this, resulting in an increase in net profit.

Non-telecommunication Sales Surpass 42%

On the 6th, KT announced that its third-quarter sales decreased by 3.4% year-on-year to 6.0012 trillion KRW, and operating profit fell by 6.4% to 292.4 billion KRW. Due to the impact of COVID-19, key subsidiaries such as BC Card and Estate underperformed, leading to a decline in consolidated sales and operating profit. However, thanks to KT's strong performance, net profit increased by 7.9% compared to the previous year. On a separate basis, KT's operating profit rose by 4.6% year-on-year to 206.8 billion KRW. Notably, the cumulative operating profit on a consolidated basis for this year reached 1.0173 trillion KRW, marking an early entry into the '1 trillion operating profit club.'

It is also notable that the proportion of non-telecommunication sales, excluding wireless, wired, and internet businesses, is increasing. KT's third-quarter non-telecommunication sales amounted to 1.9105 trillion KRW, accounting for 42.3% of KT's separate sales of 4.5205 trillion KRW. The share of non-telecommunication sales, which was around 28% in 2011, surpassed 30% in 2017 and recorded 39% in 2018. Since CEO Koo's appointment, this year has also shown an upward trend with 41% → 40.3% → 42.3%. With continuous investment in B2B sectors such as artificial intelligence (AI), digital transformation (DX), cloud, and solutions, the diversification of sales channels is leading to a stable portfolio in the non-telecommunication sector.

B2B Strengthening

Although financial and real estate subsidiaries were sluggish due to the COVID-19 impact, the media content sector posted solid results. Looking at business-specific performance, BC Card sales decreased by 0.6%, and Estate sales dropped by 39.4%, but IPTV segment sales increased by 11.9%. The IPTV business recorded a net addition of 128,000 subscribers this quarter alone, reaching a cumulative subscriber base of 8.68 million, thanks to strengthened competitiveness through partnerships such as with Netflix. The wireless business saw a 0.9% increase in sales year-on-year as 5G subscribers grew. As of the third quarter, KT's cumulative 5G subscribers reached 2.81 million, about 20% of KT's total mobile subscribers. The AI/DX business, a core B2B sector, showed steep growth with cumulative third-quarter sales increasing by 17% year-on-year.

KT plans to leverage its network infrastructure strengths, marked by the opening of the largest domestic IDC center in Yongsan on the 4th, to target the B2B market and lead in AI, big data, and cloud sectors. Through the new B2B brand 'KT Enterprise,' unveiled on the 28th of last month, KT intends to further expand its B2B market base.

Meanwhile, KT announced a plan to repurchase 300 billion KRW worth of treasury shares alongside its third-quarter earnings release. This move aligns with CEO Koo Hyun-mo's early emphasis on enhancing corporate value and returning value to shareholders. Yoon Kyung-geun, KT's Chief Financial Officer (CFO), stated, "Despite the prolonged COVID-19 pandemic, KT is generating stable management performance and will strengthen shareholder returns through dividend policies and treasury share repurchases. KT will do its best to lead B2B and DX as the best digital innovation partner to ensure sustainable growth."

This content was produced with the assistance of AI translation services.