KT Achieves 12.6 Trillion KRW in H1 Sales Amid Digico Transition... Highest H1 Record

Digital Transformation and Group Portfolio Restructuring
B2B Revenue Including Cloud... 'Woo Young-woo Effect' Also
Group Companies' Operating Profit in First Half Hits Record High

[Asia Economy Reporter Cha Min-young] KT's consolidated sales for the first half of this year reached 12.5899 trillion KRW, a 4.4% increase compared to the same period last year. Thanks to the transition to a Digital Platform Company (DIGICO) and the establishment of a group portfolio centered on core growth businesses, the company recorded the highest-ever consolidated sales for the first half. The group's operating profit for the first half also reached an all-time high, supported by the spin-off of the cloud division and efforts in external content partnerships.

Q2 Operating Profit at 459.2 Billion KRW... Down 3.5% YoY

KT announced on the 10th that its Q2 sales based on Korea International Financial Reporting Standards (K-IFRS) consolidated basis increased by 4.7% year-on-year to 6.3122 trillion KRW, while operating profit decreased by 3.5% year-on-year to 459.2 billion KRW.

On a separate basis, sales rose 0.9% year-on-year to 4.5178 trillion KRW, and operating profit fell 13.6% year-on-year to 303.5 billion KRW. Including ‘kt cloud,’ KT’s Q2 separate sales grew 2.6% year-on-year to 4.5934 trillion KRW, highlighting a notable growth trend.

Despite the transfer of cloud and Internet Data Center (IDC) businesses due to the launch of ‘kt cloud’ in April this year, KT continued its sales growth through solid performance in existing wired and wireless telecommunications businesses and growth in DIGICO and Business-to-Business (B2B) sectors.

However, Q2 operating profit declined compared to the previous year due to increased costs from external factors such as inflation and one-time labor expenses.

First Half B2B Orders Up 33% YoY

In the wired and wireless business (Telco B2C), 5G subscribers increased to 7.47 million, accounting for about 54% of total handset subscribers. Although home wired phone sales decreased by 3.4% year-on-year, demand for high-quality internet services increased, leading to a higher proportion of Giga Internet sales and a 2.5% growth in ultra-high-speed internet sales compared to the previous year.

In the Business-to-Consumer (B2C) platform business, the IPTV business revamped its service coverage from ‘watching TV’ to ‘enjoying TV’ by introducing the ‘Choice Plan,’ which allows customers to select content according to their preferences. As a result, sales grew 6.1% year-on-year.

Notably, the B2B sector performed well. B2B order volume grew 33% year-on-year for the first half. KT plans to lead the market by quickly responding to the expanding digital transformation demand of companies based on core infrastructure and differentiated services.

In the B2B platform business, the AICC (AI Contact Center) business secured large-scale projects mainly in the financial sector, with first-half sales exceeding the previous year's annual sales. Additionally, KT plans to accelerate growth in core ABC (Artificial Intelligence (AI), Big Data, Cloud)-based businesses such as smart mobility.

Sales from corporate internet services targeting B2B customers increased 5.9% year-on-year, driven by increased traffic from large content providers (CPs) and expansion of premium services. Corporate call sales grew 8.9% year-on-year due to the expansion of digital transformation (DX) services for calls and the MVNO (Mobile Virtual Network Operator) market.

Group Operating Profit Hits Record High Thanks to ‘Woo Young-woo Effect’ and Others

KT Group increased its group operating profit through portfolio restructuring such as launching the new subsidiary ‘kt cloud,’ partnerships via equity swaps with Shinhan Bank, and equity investments from CJ ENM. The group’s operating profit for the first half reached a record high of 352.4 billion KRW.

Content subsidiaries of KT Group, including KT Studio Genie and Nasmedia, achieved 34.7% sales growth year-on-year across content, advertising, and commerce sectors. The popularity of original content such as the drama ‘Extraordinary Attorney Woo’ and the variety show ‘I am SOLO’ significantly raised the brand awareness of SkyTV’s ENA channel. A virtuous cycle system linking content planning and production, platform, and distribution was also established. The merger of Season and TVING connected the country’s No. 1 online video service (OTT) platform as a key pillar of KT Group’s media value chain. Digital advertising and T-commerce businesses, including Nasmedia, have also recovered to pre-COVID performance levels.

Established in April this year, kt cloud maintained double-digit growth as the No. 1 public cloud provider. KT plans to lead the market through proactive responses tailored to demand, such as securing cloud managed service capabilities and additional IDC expansions.

The financial business also continued its growth. BC Card’s sales grew 9.3% year-on-year due to increased credit card purchases and expanded financial assets amid domestic consumption recovery. K-Bank achieved five consecutive quarters of profitability with growth in all business indicators including customers, deposits, and loans. As of the end of Q2, K-Bank had 7.83 million subscribers, an increase of 330,000 from the previous quarter, with deposit balances of 12.2 trillion KRW and loan balances of 8.7 trillion KRW.

KT Estate’s sales grew 46.3% year-on-year as hotel operations recovered amid the COVID-19 endemic atmosphere, including Andaz (Sinsa) and Sofitel (Songpa). In Q4, KT Estate plans to open the Le Meridien & Moxy hotels in Myeongdong and diversify its portfolio based on ICT capabilities.

K-Bank and Millie’s Library, both preparing for initial public offerings (IPO), are proceeding as scheduled, including submitting preliminary listing review applications.

Kim Young-jin, KT Chief Financial Officer (CFO) (Executive Director), said, “In the first half of this year, our strategy to lead the domestic industry’s digital transformation (DX), expand the playing field, and extend existing business areas to re-evaluate KT’s value was effective. We will continue to create and prove KT’s growth story as a digital platform company in the second half.”

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