"Balanced Growth through Proactive Digital Transformation" KT Reports Q2 Operating Profit of 475.8 Billion KRW, Up 38.5% YoY

KT Announces Q2 Earnings Results

[Asia Economy Reporter Eunmo Koo] KT achieved strong performance across all business sectors, posting excellent results in the second quarter following the first quarter. The expansion of non-face-to-face culture and digital transformation after COVID-19 led to increased demand for infrastructure, platforms, media, and content, driving revenue growth.

KT announced on the 10th through a public disclosure that its consolidated operating profit for the second quarter reached 475.8 billion KRW, a 38.5% increase compared to the same period last year. Revenue for the same period grew by 2.6% to 6.0276 trillion KRW. On a separate basis, revenue was 4.4788 trillion KRW and operating profit was 351.2 billion KRW, up 3.2% and 38.1% respectively from the previous year.

Growth was observed in most areas, from artificial intelligence (AI) and digital transformation (DX) to platform businesses such as media and content, as well as core existing businesses like 5G and ultra-high-speed internet expanding their premium subscriber base. In the business-to-business (B2B) sector, sales growth continued in corporate lines and AI·DX businesses. Corporate line revenue increased by 4.2% year-on-year due to increased traffic from companies expanding non-face-to-face work. AI·DX business revenue led KT’s growth with a 6.2% increase year-on-year, driven by the opening of the 14th Namguro IDC as a brand IDC in May following the 13th Yongsan Internet Data Center (IDC) last year, and expanded public and financial sector cloud contracts. Particularly, the successful establishment of the reorganized regional headquarters system last year has expanded the B2B customer base by providing services tailored to the characteristics of local governments and companies in each region.

The IPTV business continued its strong revenue growth amid the spread of ‘stay-at-home culture’ and the expansion of home learning by strengthening global partnerships and kids content. In June, it surpassed 9 million subscribers for the first time in Korea, and second-quarter revenue recorded 466.6 billion KRW, a 14.5% increase year-on-year. Additionally, the Olleh tv Tab, launched in May, is rapidly expanding its subscriber base fueled by growing home school demand.

With increased practical customer benefits such as products targeting single-person households, marketing aimed at the MZ generation, and strengthened various service partnerships and bundled benefits, the subscriber growth trend for wired and wireless communication services and IPTV expanded, maintaining solid revenue growth in the telecommunications business.

Wireless revenue reached 1.7885 trillion KRW, a 3.8% increase year-on-year, with more than 530,000 new postpaid wireless subscribers, including 5G users, added in the first half. Wireless service revenue grew 4.5% year-on-year. As of the end of the second quarter, the cumulative number of 5G subscribers was 5.01 million, accounting for 35% of postpaid mobile subscribers. The average revenue per user (ARPU) for the second quarter increased 3.0% year-on-year to 32,342 KRW.

Ultra-high-speed internet revenue rose 2.1% year-on-year to 507.4 billion KRW, supported by subscriber growth. Wired telephone revenue declined 1.6% year-on-year, continuing a slowdown in the decrease. As the proportion of business-use wired telephone subscribers steadily increases, the expansion of ‘Call DX’ services such as Call Check-in is helping reduce the decline in wired telephone revenue.

Group companies also saw revenue growth through core business competitiveness. Content group company revenue increased significantly by 16.3% year-on-year, and BC Card’s revenue improved by 4.6% year-on-year due to increased domestic purchase volume.

The restructuring of the growth-focused business portfolio is also accelerating. In the media and content business, vertical integration efforts are speeding up. Seezn was spun off as a separate corporation, and KT contributed its stake in Genie Music in-kind to the newly established KT Seezn corporation. Additionally, to strengthen content business synergy, the acquisition entity of Hyundai Media was changed to KT Studio Genie. KT Studio Genie has announced plans to release its first major original content in the second half, raising expectations for KT Group’s media and content platform performance.

K Bank recorded a net profit of 3.9 billion KRW in the second quarter, achieving its first quarterly profit since its launch in April 2017. The cumulative loss for the first half was 8.4 billion KRW, reducing the loss scale to one-fifth compared to the first half of last year (-44.9 billion KRW). It achieved remarkable growth by attracting 4 million customers in the first half alone, successfully diversifying its revenue portfolio with net interest income of 70.9 billion KRW and non-interest income of 8.5 billion KRW. Going forward, K Bank plans to position itself as a differentiated financial platform business by expanding product coverage, revamping its app, promoting partnership marketing, and strengthening group synergies.

New businesses are also progressing in earnest. The AI Call Center (AICC) is expanding services from traditional customers in insurance and finance sectors to public institutions, hospitals, and small business owners, with plans to launch an AI voice bot for small business owners next month. The AI robot business has completed preparations such as building a robot operation platform and sales system, and plans to launch various service robots including serving robots, care robots, and barista robots in the second half.

KT is also focusing on the digital & bio healthcare business. KT has already secured the basic infrastructure capable of processing large-scale bio data such as cloud, big data, and blockchain. Based on this, it is pursuing partnerships with leading domestic and international companies to prepare specific businesses such as remote medical monitoring, digital therapeutics, and medical AI solutions.

Kim Young-jin, KT’s Chief Financial Officer (Executive Vice President), said, “In the second quarter of this year, we recorded results exceeding market expectations by delivering visible achievements in B2B, financial, and media platform businesses, which is the result of KT’s strong response to market needs for digital transformation. We will do our best to enhance corporate value through customer-centric management and improvement of the group portfolio focused on growth businesses in line with the changing environment in the second half.”

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