KT's 3Q Operating Profit Up 18.4% YoY... Demand for Cloud and AICC (Comprehensive)

Q3 Consolidated Sales Increased 4.2% to 6.5 Trillion Won

[Asia Economy Reporter Minyoung Cha] KT recorded a consolidated operating profit of 452.9 billion KRW in the third quarter of this year, driven by its efforts to transform into a Digico (digital platform company). This represents an 18.4% increase compared to the same period last year. The improved performance is attributed to steady growth in 5G subscribers and increased demand in B2B (business-to-business) sectors such as cloud migration and AI-based call centers.

KT announced on the 8th that its consolidated revenue for the third quarter rose 4.2% year-on-year to 6.4772 trillion KRW, and operating profit increased 18.4% year-on-year to 452.9 billion KRW. However, net profit declined 3.4% year-on-year to 326.2 billion KRW due to the reflection of non-operating income and expenses.

On a separate basis, service revenue increased 0.6% year-on-year to 3.9444 trillion KRW, and operating profit rose 24.9% year-on-year to 323.6 billion KRW. Including ‘kt Cloud,’ launched this year, KT’s third-quarter separate service revenue reached 4.0308 trillion KRW, up 2.9% year-on-year.

5G Subscriber Share Reaches 57%

The wired and wireless telecommunications business (Telco B2C) continued to see growth in premium subscribers. The number of 5G subscribers reached approximately 5.96 million, accounting for about 57% of total handset subscribers. Although home wired phone revenue decreased 7.8% year-on-year, the share of Giga Internet sales increased due to sustained demand for high-quality internet services, resulting in a 2.6% year-on-year increase in high-speed internet revenue.

In the B2C platform business (DIGICO B2C), the IPTV business was completely revamped from the existing ‘Olleh TV’ to ‘Genie TV,’ introducing the AI-based ‘Media Portal’ service to usher in a new era of home media. IPTV business revenue increased 5.8% year-on-year.

The B2B platform business (DIGICO B2B) has continued strong growth this year. Following the COVID-19 pandemic, demand for digital transformation (DX) among companies has increased, with cumulative orders for the B2B business in the third quarter growing 21% year-on-year. The AICC business grew 91.7%, driven by expansion of large-scale projects mainly in the financial sector, continuing from the previous quarter.

In the smart mobility sector, new business opportunities centered on ABC (AI, Big Data, Cloud) are increasing due to growth in the OEM (Original Equipment Manufacturer) and in-vehicle infotainment (IVI) markets.

In the business targeting B2B customers (Telco B2B), corporate internet business revenue increased 10.9% year-on-year, supported by increased traffic from large domestic and international CPs (Content Providers) and successful acquisition of new CPs. Corporate call revenue grew 6.8% year-on-year, driven by high average revenue per user (ARPU) from corporate internet phones and expansion of the MVNO (Mobile Virtual Network Operator) market.

Continued Efforts to Expand Partnerships with Shinhan Bank, CJ ENM, and Others

Content subsidiaries such as KT Studio Genie and Nasmedia also stood out. They achieved high growth across various business areas including content, advertising, and commerce, with revenue increasing 24.7% year-on-year. SkyTV, which followed the drama ‘Extraordinary Attorney Woo’?which recorded a peak viewership rating of 17.5%?with subsequent productions like ‘Shinbyeong,’ ‘Good Job,’ and ‘Eoljuka Yeonae Ddawi,’ enhanced the brand awareness of the newly launched ENA channel this year. Nasmedia strengthened its competitiveness in digital advertising.

kt Cloud led the public cloud market, maintaining its growth by ranking first in the number of institutions and systems for public cloud migration projects from the first to sixth rounds this year. It solidified its position based on experience and capabilities in the Internet Data Center (IDC) market, as well as safe operation and inspection systems.

The financial business also continued to grow. BC Card’s revenue increased 10.8% year-on-year, influenced by increased credit card purchases due to domestic consumption improvement. K Bank’s subscribers reached 8.01 million at the end of the third quarter, up 180,000 from the previous quarter, with deposits totaling 13.5 trillion KRW and loans amounting to 9.8 trillion KRW at the end of the third quarter.

The KT Group has built partnerships through equity swaps with Shinhan Bank and comprehensive cooperation in content business with CJ ENM this year. In September, it acquired mutual equity with Hyundai Motor Group to lead future mobility business. KT and CJ ENM plan to merge their OTT platforms, Season and TVING, on December 1 to strengthen competitiveness in the domestic media and content industry and accelerate the growth of K-content. KT Submarine, a submarine cable construction specialist, attracted LS Cable, one of the largest cable manufacturers in Korea, as a strategic shareholder.

Kim Young-jin, Executive Vice President and Chief Financial Officer (CFO) of KT, said, “Despite external uncertainties such as inflation, KT has achieved growth in Digico and B2B businesses. In the remaining period, we will strengthen growth and profitability-focused management through Digico transformation to enhance corporate value.”

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