KT received its highest-ever performance on a quarterly basis. It is analyzed that a combination of ..
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KT received its highest-ever performance on a quarterly basis. It is analyzed that a combination of factors such as reflected profits from competitors’ USIM hacking incidents, artificial intelligence (AI) business development, real estate sales performance, and large-scale manpower movement led to the increase in performance.
KT announced on the 11th that its sales based on consolidated financial statements in the second quarter of this year were KRW 7.42 trillion, up 13.5% from the same period last year. Operating profit jumped 105.4 percent to 1.148 trillion won and net profit rose 78.6 percent to 733.3 billion won during the same period.
It is the first time since its foundation that KT’s quarterly operating profit exceeded 1 trillion won. The stock market forecast also exceeded. Previously, FnGuide counted KT’s second-quarter sales of 7.25 trillion won and operating profit of 865.8 billion won.
KT’s good performance was led by subscriber movement and preemptive AI conversion (AX) due to the unprecedented USIM hacking accident at SK Telecom. KT has absorbed the most subscribers who left SK Telecom. The full-fledged effect is expected to be reflected in the third quarter of this year.
Specifically, sales of the wireless business expanded 1.6% year-on-year thanks to the expansion of 5G subscribers and the net increase in number mobile subscribers. The number of wireless communication subscribers increased by more than 1.04 million from 26.445 million in the previous quarter to 27.49 million.
The sales of the landline business increased by 1.4% year-on-year. In particular, high-speed Internet sales increased 2.1% year-on-year. The number of high-speed Internet subscribers exceeded 10 million in May. Business-to-business (B2B) sales grew 4.5% compared to the same period last year due to the expansion of AX orders.
Affiliates’ progress is also notable. KT Cloud’s sales increased 23.0% year-on-year due to the establishment of a data center (DC) and balanced growth in the cloud business. KT Estate’s performance improved thanks to profit from the sale of Lotte East Pole in Guui-dong, Gwangjin-gu, Seoul, and strong office and hotel rentals. Sales profit is one-time, but excluding this, operating profit is also KRW 468.7 billion, up 30.6% from the same period last year.
KT predicted that competition for subsidies in the mobile communication market will not overheat despite the abolition of the law on improving the distribution structure of mobile communication terminal devices. This is because the penetration rate has increased, the device replacement cycle has been prolonged, and telecommunication companies are focusing on AI and IT fields.
“The Galaxy flagship model was recently released, but there was no excessive competition to the point of concern,” KT Chief Financial Officer Jang Min said in a conference call on the same day. “If iPhones and others are released in the future, competition is likely to intensify temporarily, but it will be difficult to prolong it.”
In line with this trend, KT is also planning to focus on AX. To this end, it plans to release the results of cooperation with global big tech within this year. After introducing the independently developed Large Language Model (LLM) Faith 2.0 last month, the company plans to unveil an AI model developed in collaboration with Microsoft (MS). It also builds a high-tech communication environment by upgrading AI infrastructure through continuous investment.
“We will introduce new AI services to customers through cooperation with big tech such as MS and Palantir,” said CFO Jang. “We will also incorporate AI-based innovation to improve KT’s base station operation efficiency.”
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