[Click eStock] KT's Operating Profit Falls Short of Expectations, but Dividends Are a 'Surprise'

Dividend increased by 250 won to 1,350 won... Dividend yield expected to be 5.8% this year

[Asia Economy Reporter Minwoo Lee] KT's fourth-quarter results last year fell short of expectations, but dividends increased. It is analyzed that steady performance improvement in the future will lead to shareholder returns such as dividends.

On the 10th, Korea Investment & Securities maintained a 'Buy' rating and a target price of 34,000 won for KT based on this background. The closing price the previous day was 24,050 won.

KT recorded consolidated sales of 6.2073 trillion won and operating profit of 166.8 billion won in the fourth quarter of last year. This represents an increase of 0.19% in sales and 12.47% in operating profit compared to the same period last year. Sales exceeded market consensus by about 0.56%, but operating profit fell short by 9.30%. Taewan Oh, a researcher at Korea Investment & Securities, explained, "Despite strong service sales, the sluggish performance of subsidiaries in the finance and real estate sectors and a decrease in device revenue caused this," adding, "Non-operating losses included a one-time impairment of 190 billion won for 28 gigahertz (GHz) and a 50 billion won impairment on investment stocks."

Wireless segment sales reached 1.733 trillion won, increasing by 1% year-on-year due to the net increase in 5G subscribers and a rise in average revenue per user (ARPU). Media business sales were 439 billion won, up 7% year-on-year, driven by IPTV subscriber growth and increased platform sales. The B2B business saw increased demand for corporate messaging services, and demand related to new IDC remains solid.

Following the performance improvement, KT decided to increase the dividend per share by 250 won from the previous year to 1,350 won. It is expected that the annual dividend yield will reach 5.8% as growth continues this year. Korea Investment & Securities forecast KT to record annual sales of 24.575 trillion won and operating profit of 1.399 trillion won this year, estimating increases of 2.8% and 18.1%, respectively, compared to last year. Researcher Oh predicted, "With the expected increase in 5G subscribers and strong IPT performance, and with various costs such as labor and marketing expenses being controlled, the performance improvement trend will continue."

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