Seoul, South Korea - KT (NYSE: KT) reported stable financial results for the third quarter, with revenue growth in all major business segments despite economic headwinds.
Consolidated revenue rose 3.4% year-on-year to KRW 6.7 trillion, the highest quarterly total since KT's IPO.
Growth drivers included mobile, fixed line, Internet, media, corporate services, financial services, real estate, and content production.
Why it matters:
KT, whose largest shareholder is South Korea's national pension fund, has always been under pressure from the regime after a change of government or president.
Since its privatization, Hwang Chang-gyu was the only CEO to serve consecutive terms.
Since the appointment of the new CEO, the market has focused on whether the company can continue its normal operations.
The Key Points
- The mobile segment grew by 1.6%, with over 9.5 million 5G subscribers. Roaming revenues increased due to more domestic and international travel. Fixed grew 1.8%, driven by continued demand for Gigabit Internet.
- Internet and Media revenues grew by 3.2% and 3.9%, respectively, as subscribers migrated to premium content bundles. The re-launch of the Genie TV platform doubled the number of VOD and OTT users.
- Enterprise Services grew by 2.7%, driven by digital transformation projects and robust real estate activity. While Enterprise Internet declined due to rationalization, dedicated video-surveillance network lines and cloud partnerships expanded.
- Finance, Real Estate, and Content grew. BC Card grew in card issuance and lending. K Bank recorded its 10th consecutive profitable quarter. KT Estate benefited from office leasing and hotels. Several hit K dramas were produced, although declines in advertising and commerce led to a 3.6% decline in content revenues.
- Cloud revenue jumped 34.5% on private cloud orders and data center growth. KT is solidifying its AI cloud leadership through infrastructure and partnerships. New AI packages bundle large models to reduce implementation costs.
- Consolidated operating income declined to KRW 321.9 billion, or KRW 193.5 billion on a standalone basis, due to early wage settlements and content expenses. However, these were timing effects expected to moderate in the fourth quarter. Profit momentum remained steady.
What They Say:
CFO Kim said
KT continues to balance B2C and B2B growth while expanding core portfolios and aims to create value through its "Digital Service First" communications and information technology strategy.
What Comes Next?
KT recently announced a new medium-term shareholder payout policy based on its growth confidence.
It will pay at least 2022 per share from 2023-2025 and may combine dividends with buybacks.
KT also plans to move to quarterly dividends in 2024.