KT Reports 4.2% Increase in Operating Profit... CEO Kim Young-seop's First Performance Review of the Year (Update)

KT Group Q1 Earnings Announcement on the 10th
Cloud and Real Estate Sales Increased but
Labor Costs 1 Trillion Won... Debt Ratio 129.8%

Kim Young-seop, CEO of KT (left), is attending the 'AI Strategy Supreme Council Launch Ceremony and 1st Meeting' held on the 4th at the FKI Tower in Yeouido, Seoul. Photo by Kang Jin-hyung aymsdream@

KT Group's operating profit for the first quarter of this year recorded 506.5 billion KRW, a 4.2% increase compared to the same period last year. Since the appointment of financial expert Youngseop Kim as KT CEO, the improvement in performance has become more evident. However, operating expenses, including labor costs, also rose by 3%. While the cloud and real estate businesses saw double-digit sales growth, content subsidiaries, BC Card, and KT Skylife showed a downward trend.

KT announced on the 10th that on a consolidated basis, its sales for the first quarter of this year were 6.6546 trillion KRW, and operating profit was 506.5 billion KRW, up 3.3% and 4.2% respectively compared to the same period last year. Net profit for the period was 393 billion KRW, a 26.9% increase from the same period last year.

However, operating expenses, including labor costs and business expenses, also increased by 3.2% to 6.1481 trillion KRW compared to the same period last year. CEO Kim, who took office in August last year, implemented a personnel reorganization at the end of the year that reduced the number of KT executive-level employees by 20%. Nevertheless, in this earnings announcement, first-quarter labor costs recorded 1.1009 trillion KRW, showing a 3% increase compared to the same period last year. The debt ratio rose by 8.3 percentage points to 129.8% compared to the first quarter of last year before CEO Kim's appointment.

Although debt increased, KT's cash assets are steadily accumulating. As of the end of March, cash and cash equivalents exceeded 3 trillion KRW, up 42.3% from the first quarter of last year.

In the wireless sector, the proportion of 5G mobile subscribers surpassed 9.94 million, accounting for 74% of the total, and sales reached 1.7365 trillion KRW, a 1.7% increase.

KT expanded consumer choice by introducing mid-to-low priced 5G plans to reduce household communication costs, but the average revenue per user (ARPU) increased. The first-quarter ARPU was 34,461 KRW, a 2% rise from 33,771 KRW in the same period last year.

KT headquarters building. Photo by Jo Yongjun jun21@

In the wired sector, sales increased by 2.1% and 2.3% year-on-year to 620.8 billion KRW and 518.6 billion KRW, respectively, due to growth in internet and IPTV subscribers. However, sales from the now largely obsolete home wired phone service decreased by 5.7% to 183 billion KRW compared to the same period last year.

With the expansion of business-to-business (B2B) transactions utilizing artificial intelligence (AI) technology, corporate service sales increased by 5% to 895 billion KRW. However, BC Card's sales decreased by 1.8% year-on-year to 935.6 billion KRW, Skylife's sales fell by 0.2% to 254.4 billion KRW, and content subsidiaries such as Nasmedia and KT Studio Genie recorded a 2.8% decline to 138.6 billion KRW.

KT Estate's sales increased by 20.3% compared to the same period last year, and KT Cloud's sales grew by 17.8% year-on-year. KT announced plans to expand its Internet Data Center (IDC) business due to increased AI infrastructure demand at the 'KT Cloud Summit 2024' event held on the 2nd.

At the regular shareholders' meeting in March, KT introduced quarterly dividends through amendments to its articles of incorporation and recently announced a cash dividend of 500 KRW per share for the first quarter. The day before, KT disclosed that it had canceled 5,143,300 shares, equivalent to 2% of its 4.41% treasury stock holdings, to enhance shareholder value.

Jang Min, KT CFO, said, "KT Group was able to deliver results that met market expectations through stable growth in B2C, B2B businesses, and group companies. We will strive to secure future growth engines through our leap as an AICT company and enhance both corporate value and shareholder value based on this."

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