In Q2, KT posts an operating loss

KT, the nation’s No. 2 mobile carrier, posted an operating loss of 813 billion won ($793.9 million) in the second quarter after the company spent 1 trillion won on early retirement payments.

But its revenues increased from a year earlier in all sectors except for its fixed-line business.

The country’s biggest fixed-line operator announced its quarterly earnings yesterday, showing that its revenue rose 2.4 percent year-on-year. Along with the operating loss, KT posted a net profit deficit of 757.2 billion won.

“Although we posted an operating loss because of the huge cost in carrying out large-scale early retirement payments, profitability is expected to improve in the third quarter, as the cost-saving effects will likely appear in the next quarter along with the streamlined businesses and the earnings turnaround in the wireless business,” said a KT spokesman.

All of KT’s businesses showed increased revenue in the second quarter except for fixed lines.

The flagship wireless business saw a 2.7 percent year-on-year revenue increase to 1.799 trillion won due to 300,000 new subscribers from April to June.

As the number of subscribers to LTE plans increased to 56.1 percent, KT’s average revenue per user rose 6.3 percent over the same period last year to 33,619 won.

Revenues from its media business were also up by 13.8 percent to 381.3 billion won. The number of IPTV subscribers surpassed 5.37 million with 210,000 new subscribers in the second quarter. KT aims to attract 800,000 new IPTV subscribers this year.

“The competitiveness of KT’s communications business is gradually recovering in all sectors, including wired and wireless businesses,” said Kim In-hoe, KT’s chief financial officer. “KT achieved an increase of 300,000 in the number of wireless subscribers during the second quarter, despite government sanctions against mobile carriers such as business suspensions.”

However, its fixed-line sales declined again in the second quarter. Both the number of subscribers and calls decreased, and revenue declined 6.6 percent from a year earlier to 1.408 trillion won.

The nation’s No. 2 portal operator Daum Communications yesterday revealed its sluggish earnings in the second quarter.

Daum said its operating profit plunged 30.2 percent from a year earlier to 16.6 billion won between April and June due to heavy marketing and labor costs, as well as declining sales in its games business. But its revenue increased 4.8 percent year-on-year to 138.9 billion won.

“Revenues increased as sales from the mobile business increased along with special promotions in the second quarter,” said a Daum spokesman.

“However, operating profit fell due to increased marketing costs during the World Cup and the labor costs.”

Its operating costs increased 12.5 percent over the second quarter of last year to 122.3 billion won. Sales of games dropped 18.8 percent to 7 billion won.

Daum also said that in the mobile sector, the number of visitors to Daum apps shot up 43 percent over the same period last year as it reorganized its user interface to display more competitive mobile content on the front page.

Its webtoon app showed steep growth of 47 percent from a year earlier in terms of the number of visitors, and its UCC video content service Daum tvPot also saw a 190 percent increase in the number of visitors because of its improved live content, including a sports channel and stabilized streaming technology.

Daum plans to finalize its merger with the nation’s No. 1 mobile messenger operator Kakao Corporation on Oct. 1 after shareholders approve the merger at their meeting on Aug. 27.

BY kim jung-yoon [kjy@joongang.co.kr]