KT achieved impressive results in the first quarter of 2024, meeting market expectations thanks to balanced growth in both B2C and B2B businesses, as well as improvements in the performance of key business portfolios within the KT Group.
According to KT, the revenue for Q1 2024, based on the Korean International Financial Reporting Standards (K-IFRS), was 6.6546 trillion won on a consolidated basis and 4.6948 trillion won on an individual basis, marking a growth of 3.3% and 1.6% compared to the same period last year, respectively. The standalone service revenue surpassed 4 trillion won for the first time in nearly 14 years, recording 4.0406 trillion won.
The consolidated operating profit increased by 4.2% year-on-year to 506.5 billion won, bolstered by solid performance in both wired and wireless sectors, as well as profit improvements in core areas such as IDC and cloud services and real estate. Standalone operating profit rose by 1.5% year-on-year to 393.8 billion won, despite increased business costs due to inflation, thanks to revenue growth and efficient marketing activities.
▶ Balanced growth in B2C and B2B businesses, along with revenue expansion in five major growth sectors such as AICC and IoT
In the wireless sector, the number of 5G subscribers surpassed 9.95 million, accounting for 74% of total handset subscribers, and wireless service revenue grew by 1.9% compared to the same period last year, aided by growth in roaming services and the expansion of the MVNO market. KT introduced 10 low-cost 5G plans and 8 direct pricing plans called ‘Yogo’ in January, enhancing customer choices for 5G tariff plans. KT plans to continue offering customized plans and innovative products to deliver differentiated customer experiences.
The wired sector continued to see revenue growth of 1.0% year-on-year. High-speed internet revenue grew by 2.1% year-on-year, driven by net additions of giga internet subscribers and the launch of the new Wi-Fi model ‘KT Wi-Fi 6D’ with differentiated added services. The media business saw a 2.3% year-on-year growth in revenue, supported by the expansion of IPTV subscribers and premium plan sales. Recently, KT announced its vision to lead the media industry’s AI transformation (AX) by showcasing media-specialized AI technologies such as ‘Magic Platform’ during ‘Media Day’.
The enterprise service business recorded a revenue increase of 5.0% year-on-year to 895 billion won, fueled by steady growth in corporate internet/data services and revenue from large projects already secured, as well as the expanding demand for corporate AX services. Particularly, the surge in AX demand from domestic companies spurred by generative AI is significant. KT plans to quickly respond to corporate customer demands by integrating AI solutions into existing telecom services and providing differentiated AX services by industry, thereby expanding its growth trajectory.
The five major growth sectors, including AICC, IoT, smart mobility, smart spaces, and energy, achieved a 4.9% increase in revenue year-on-year, largely due to the expansion of large projects and customer acquisition focusing on AICC and IoT. Notably, AICC and IoT businesses witnessed double-digit revenue growth compared to the previous year, propelled by the increased adoption of AICC by financial companies and the activation of IoT projects related to remote monitoring, environment, and safety.
▶ Clear improvements in revenue from KT Group’s core business portfolio, including IDC, cloud, and real estate
KT Group demonstrated clear improvements in revenue and operating profit across its core business portfolio. Firstly, K Bank recorded a customer deposit balance of 24 trillion won and a loan balance of 14.8 trillion won at the end of Q1 2024, representing increases of 44.1% and 23.6% year-on-year, respectively. The number of customers also surpassed 10 million in Q1. K Bank plans to file for an IPO this half of the year based on this growth momentum, aiming for public listing within the year. BC Card improved its operating profit significantly compared to the previous year due to stable risk management and efficient execution of sales management costs.
KT Estate experienced a 20.3% increase in revenue year-on-year due to balanced growth between its sales and leasing businesses. Notably, stable operations of the ‘Le Meridien & Moxy Hotel,’ which opened in November 2022, and the steady increase in occupancy rates such as with Sofitel Ambassador contributed to sustained structural growth.
KT Cloud achieved a 17.8% year-on-year revenue growth, driven by increases in colocation sales focused on global customers and orders for DBO (Design, Build, Operate) projects. KT Cloud shared its business strategy during the ‘KT Cloud Summit 2024’ held on the 2nd, detailing plans to continually expand its IDC operations and enhance service models in response to growing demand for AI infrastructure.
▶ Announcement of quarterly dividends and stock buyback plans to enhance shareholder and corporate value
At its regular general shareholders’ meeting in March, KT introduced quarterly dividends beginning in 2024 through amendments to its articles of incorporation, along with announcing a cash dividend of 500 won per share for Q1. Additionally, on the 9th of this month, it disclosed plans to buy back 5.443 million shares, which represents 2% of its treasury stock holdings of 4.41%, aimed at enhancing shareholder value.
KT CFO Jang Min stated, “The KT Group was able to achieve results that meet market expectations due to the balanced growth of B2C and B2B businesses alongside stable growth in our group. We will strive to secure future growth engines through our leap towards becoming an AICT company, thereby enhancing both corporate and shareholder value,” he remarked.
Lee Sang-jin daedusj@autodiary.kr