[Click eStock] "KT, Overwhelming 2Q Earnings and 6% Dividend"

5G, IPTV, and Content All Growing... Subsidiaries Also Sailing Smoothly

[Asia Economy Reporter Minwoo Lee] KT posted strong earnings in the second quarter of this year, significantly exceeding market consensus. IPTV and content segment revenues grew substantially, while wireless services also delivered solid performance, driving the company's growth.

On the 11th, Hyundai Motor Securities maintained a 'Buy' rating on KT and raised the target price by 5% to 42,000 KRW. The closing price the previous day was 33,400 KRW.

KT reported consolidated sales of 6.0276 trillion KRW and operating profit of 475.8 billion KRW in the second quarter. Compared to the same period last year, sales increased by 2.6% and operating profit by 38.5%. Notably, operating profit exceeded market expectations by 14.3%. Hyundai Motor Securities analyst Hyunyong Kim explained, "IPTV and content revenues grew by 14.5% and 19.1% respectively compared to the same period last year, and wireless service revenue also increased by 4.5% year-on-year, supported by a 3% growth in average revenue per user (ARPU). Operating profit demonstrated overwhelming performance due to cost efficiency, reduced investment and depreciation expenses, and strong results from financial and real estate subsidiaries."

In particular, standalone operating profit also rose 38.1% year-on-year to 351.2 billion KRW. The core wireless business recorded strong results, while non-core segments also achieved profit growth compared to the previous year. The wireless segment is considered to have entered a phase of ARPU growth driven by 5G effects. IPTV and high-speed internet subscribers increased by 128,000 and 83,000 respectively, outperforming competitors. Subsidiaries such as BC Card and the real estate division showed strong rebounds after bottoming out.

With standalone net profit expected to comfortably reach 1 trillion KRW this year, expectations for dividend yield are also rising. Hyundai Motor Securities raised KT's expected dividend per share from 1,500 KRW to 2,000 KRW for this year. Analyst Kim stated, "Considering a dividend payout ratio of 50%, a net profit of 1 trillion KRW corresponds to a dividend per share of 1,915 KRW, so a dividend close to 2,000 KRW per share is expected this year. The expected dividend yield of the surviving entity after SK Telecom's spin-off is estimated at about 5.4%, so KT is expected to maintain its dividend superiority."

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