Seoul, South Korea - KT (NYSE: KT) posted robust earnings results for the second quarter of 2023, defying market expectations.
Why it matters:
The departure of the previous CEO and the company's management by a de facto interim CEO was expected to lead to a company deterioration, but the company delivered an earnings surprise.
This shows resilience in an uncertain business climate characterized by inflationary cost spikes.
The Key Points
- KT reported a 3.7% year-on-year increase in revenues to KRW 6.54 trillion (US$5.01 billion), a 2.1% increase in service revenues to KRW 4.18 trillion (US$3.2 billion), and a 25.5% increase in operating profit to KRW 576.1 billion (US$441.2 million).
- The company's B2B platform business, DIGICO B2B, saw a 19% increase in orders due to large projects and a recovery in the real estate industry. KT's B2C platform business, DIGICO B2C, recorded a 1.2% growth in its IPTV business.
- KT's wired and wireless business, Telco B2C, grew with 5G subscribers reaching 9.28 million, accounting for 68% of total subscribers.
- Despite lower revenues from KT Group's content subsidiary due to the economic downturn affecting advertising and commerce markets, KT Cloud achieved an enterprise value of KRW 4 trillion (US$3.06 billion). It secured KRW 600 billion (US$459.6 million) in investments.
The Big Picture:
Despite challenging business conditions, including inflationary pressures, KT managed to maintain growth, especially in B2C and B2B businesses.
It capitalized on opportunities in 5G subscriptions, high-speed internet, and cloud businesses, offsetting declines in other areas such as its content subsidiary.
As KT welcomes new leadership, it aims to maintain this trend and increase shareholder value, strengthening its position in the global telecommunications arena.
US$1=KRW1,305.01
