KT under Koo Hyun-mo's leadership posts 1 trillion KRW in separate operating profit last year... K Bank also turns profitable

Wireless 5G Subscribers Near 6.4 Million
Subsidiaries K-Bank and Millie's Library Pursue IPO

[Asia Economy Reporter Cha Min-young] KT, led by CEO Koo Hyun-mo, achieved an operating profit of 1 trillion KRW on a consolidated basis for seven consecutive years and simultaneously reached an operating profit of 1 trillion KRW on a separate basis for the first time in five years. The number of 5G service subscribers approached 6.4 million, and efforts to transform into a digital platform company (DIGICO) led to improved profitability. The internet-only bank K-Bank also succeeded in turning a profit on an annual basis, easing the burden.

Early Achievement of 1 Trillion KRW Operating Profit on Separate Basis

KT announced on the 9th that its consolidated operating profit for 2021 increased by 41.2% to 1.6718 trillion KRW. During the same period, sales rose 4.1% year-on-year to 24.898 trillion KRW.

The headquarters’ performance stood out. Due to growth in the existing telecommunications business and the DIGICO business, separate sales and operating profit also grew by 2.8% and 21.6% year-on-year to 18.3874 trillion KRW and 1.0682 trillion KRW, respectively. Accordingly, the separate operating profit target of 1 trillion KRW for 2022 was achieved early. Among these, service sales reached 15.5041 trillion KRW, up 2.8% from the previous year.

Starting with this earnings announcement, KT changed its sales classification system to ▲wired and wireless business (Telco B2C) ▲telecommunications business for B2B customers (Telco B2B) ▲B2C platform business (DIGICO B2C) ▲B2B platform business (DIGICO B2B) to efficiently communicate DIGICO performance.

Among the existing wired and wireless business (Telco B2C), wireless surpassed 6.38 million 5G subscribers, accounting for 45% of total handset subscribers. Sales increased 2.4% year-on-year due to qualitative growth driven by the expansion of subscription-linked services such as Netflix and Disney Plus (+). Wired telephone sales decreased 3.9% year-on-year, while high-speed internet sales rose 2.2% year-on-year.

The B2C platform business (DIGICO B2C) recorded a 5.8% year-on-year sales growth due to expansion of mobile platforms including media business and authentication/payment services. The media business, led by IPTV’s steady subscriber growth, firmly maintained its position as the number one paid broadcasting platform operator, driving a 6.1% sales increase year-on-year.

The telecommunications business for B2B customers (Telco B2B) saw sales rise 5.1% year-on-year due to increased data traffic and demand for dedicated lines. In particular, corporate call sales increased 8.6% year-on-year through digital transformation (DX) such as AI-integrated corporate phones and advanced enterprise messaging RCS services.

Among the B2B platform business (DIGICO B2B), cloud and Internet Data Center (IDC) sales grew 16.6% year-on-year thanks to the full-scale operation of the Yongsan IDC center and strong performance in the DBO (Design-Build-Operate) business, which designs, builds, and operates IDCs for other operators.

In the AI/New Biz sector, the AICC business launched the ‘AI Call Secretary’ for small business owners following the existing AI contact center. AI robots officially entered the market last year with the launch of serving robots and are expanding into various industries. KT plans to expand the market by adding robot lineups based on ABC (AI, Big Data, Cloud) technology and fostering an ecosystem.

Subsidiary K-Bank Also Posts First Profit

Subsidiaries also contributed. K-Bank, Korea’s first internet-only bank, recorded a net profit of 22.4 billion KRW in 2021, achieving its first annual profit four years after its launch. As of the end of last year, it had 7.17 million subscribers, deposits of 11.32 trillion KRW, and loans of 7.09 trillion KRW. K-Bank is currently pursuing an initial public offering (IPO) through the selection of underwriters.

BC Card’s sales declined in 2020 due to a decrease in foreign tourists and reduced consumption, but sales grew 5.7% year-on-year thanks to increased domestic consumption and efforts to expand new businesses.

Content group sales grew 20.4% year-on-year, supported by the expansion of commerce digital advertising business and mergers and acquisitions (M&A) such as Millie’s Library and Media Genie. Studio Genie, launched as the control tower for KT Group’s media content business, secured a production lineup of more than 10 titles in 2022 and plans to expand platform coverage through planning and development of global key tentpole content. Millie’s Library, incorporated into KT Group last year, plans to expand its AI audio platform business in collaboration with KT and Genie Music and is pursuing an IPO this year.

Kim Young-jin, KT Chief Financial Officer (CFO), said, “2021 was a year of building a future foundation by enhancing customer satisfaction in existing businesses and accelerating the transition to DIGICO, with significant growth in B2B business performance. In 2022, we will expand digital transformation (DX) and platform new businesses based on stable performance in existing businesses.”

KT also decided on a cash dividend of 1,910 KRW per share this year, a 41.5% increase from the previous year. The dividend will be finalized after approval at the regular shareholders’ meeting in March.

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