Goo Hyun-mo's 'Digico KT'... Q1 Operating Profit Reaches 626.6 Billion Won

Highest Quarterly Operating Profit Since 2010
Steady Sales Growth Across All Sectors Including Wired, Wireless, Robots, and IDC
Financial and Content Partnerships Also Accelerate

Koo Hyun-mo, CEO of KT

[Asia Economy Reporter Cha Min-young] KT, led by CEO Koo Hyun-mo (photo), achieved a ‘Digital Platform Company (DIGICO) transformation’ and posted an operating profit of 626.6 billion KRW in the first quarter, an earnings surprise level. This is the largest quarterly operating profit since Q3 2010. Profitability improved as sales increased evenly across wired and wireless businesses as well as cloud, Internet Data Center (IDC), robotics, content, and finance sectors.

Earned 135 billion KRW More Than Forecast

KT announced on the 12th that its consolidated operating profit for Q1 this year rose 41.1% year-on-year to 626.6 billion KRW. This figure exceeds the existing market consensus (average estimate) of 491.3 billion KRW by more than 135 billion KRW. The result reflects one-time gains of approximately 74.6 billion KRW from asset sales along with revenue growth. Sales during the same period increased 4.1% year-on-year to 6.2777 trillion KRW.

KT’s 5G subscribers surpassed 6.95 million, accounting for about 50% of total handset subscribers. Wireless revenue increased 1.9%, boosted by the effect of subscription-linked services. Home wired phone revenue decreased 6.8% year-on-year, but high-speed internet revenue rose 2.6% compared to the same period last year. The IPTV business solidified its position as the number one paid broadcasting platform operator, increasing 9.3% year-on-year. Telecommunications business targeting B2B customers saw a 7.1% increase in sales due to rising corporate internet demand driven by increased data traffic. Corporate call revenue jumped 14.3% due to increased traffic usage by major content providers (CPs), as well as growing demand for giga office and corporate internet phone services.

Among B2B platform businesses, high-growth new businesses such as cloud, IDC, artificial intelligence (AI), and new business (NewBiz) expanded, resulting in a 10.5% year-on-year sales growth.

Sales grew 14.7% year-on-year thanks to the full-scale launch of virtualization-based AI GPU services and strong performance in IDC design, construction, and operation businesses. The AI and NewBiz sectors drove a high sales growth of 40.7% year-on-year by securing large core projects such as the AI Contact Center (AICC) business. AI robotics expanded its lineup this year from service robots last year to include quarantine robots.

Full-Scale Financial and Content Partnerships and Cooperation

In March, KT strengthened its media and content business competitiveness by signing a partnership including a 100 billion KRW equity investment in KT Studio Genie, which was jointly established with CJ ENM. The content group posted sales 35.5% higher than the previous year, supported by expansion of commerce digital advertising business and mergers and acquisitions (M&A) such as Millie’s Library and Media Genie. Recently, KT Studio Genie expanded its original content lineup and relaunched Sky TV’s channels.

In January, KT also began business cooperation to strengthen financial digital transformation (DX) competitiveness through a share swap with Shinhan Financial Group. K Bank’s subscribers reached 7.5 million at the end of Q1 this year, an increase of 330,000 from the end of last year. K Bank recently selected underwriters and started preparing for an initial public offering (IPO). BC Card launched its MyData service in January, providing hyper-personalized financial services through connections with the largest number of financial institutions (316 companies). With KT obtaining a preliminary license for the MyData business last month, fusion services combining telecommunications and financial data are expected to become possible.

Kim Young-jin, KT’s Chief Financial Officer (CFO), said, "KT led the domestic industry’s DX and achieved excellent results compared to the same period last year by strengthening its business portfolio through active partnerships and cooperation. Going forward, KT will continue to strive to grow further by successfully settling DIGICO and advancing as ‘Korea Technology (KT)’."

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