KT's operating profit dips in Q3

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KT attributed a drop in its third-quarter operating profit to increased labor costs as the company announced its latest earnings report Friday.

The telecommunication company's operating profit for the July-to-September period was 292.4 billion won ($260.7 million), down 6.4 percent year-on-year, while quarterly revenue dropped 3.4 percent, to 6 trillion won. KT's net profit during the same period was 230.1 billion won.

KT attributed the decline to a drop in sales of its mobile business and subsidiaries like BC Card and the hotel business KT Estate which were impacted by the coronavirus pandemic.

Revenue of KT’s wireless business rose by 0.9 percent year-on-year, owing to an increased customer base for its 5G services. KT’s 5G services during the third quarter reached 2.81 million users, about one-fifth of KT's overall mobile communication subscribers.

During a Friday conference call, KT said Apple's first 5G handset iPhone 12 was selling well and is expected to accelerate customers' transition from 4G LTE to 5G. The company expected the proportion of 5G subscribers to reach 25 percent by the year's end.

IPTV service revenue also saw meaningful growth of 11.9 percent year-on-year, to 459.3 billion won. KT said its partnership with Netflix led to an additional 128,000 members, which resulted in the cumulative total of 8.68 million members.

On Friday, KT also announced its plan to purchase its own shares worth 300 billion won to "restore the value of KT's stock."

"Our judgement is that KT's stock price is underestimated compared to its intrinsic value," a company executive said during the Friday conference call.

In the first three quarters of this year, KT has reported a cumulative 1 trillion won in operating profit for 2020.

BY LEE JEE-YOUNG [lee.jeeyoung1@joongang.co.kr]