KT reports expectation-beating net profit for first quarter

KT reported an expectation-beating net profit of 455.4 billion won ($353 million) in the first quarter thanks to rapid growth in the IT service businesses targeting corporate clients, the company said Thursday.

KT's net profit in the first quarter grew 39.5 percent on year, beating the market consensus of 8.1 percent growth to 352.9 billion won compiled by FnGuide.

Revenue was 6.28 trillion won in the January-March period, a 4.1 percent increase on year, falling slightly short of the market consensus with a margin of 12 billion won.

Operating profit jumped 41.1 percent to 626.6 billion won, beating the market consensus of 497.7 billion won.

The company attributed the upbeat results to the growth in the wireless business and “Digico” units, which refer to non-telecom businesses that provide digital transformation-related services, as opposed to the previous model based on network subscriptions.

KT counts Digico units as one of the company’s future growth engines.

KT posted quarterly revenue of 2.4 trillion won in the business-to-customer (B2C) telecom business, a 1.2 percent growth on year.

Its wireless communication services led the sales growth in the telecom sector. An increase in the number of 5G users improved its profitability, according to KT.

Currently, KT has 6.94 million 5G users, which take up half of the company’s total handset service subscribers. The number of 5G subscribers jumped 9 percent compared to the previous quarter.

Landline telephone revenue fell 6.8 percent to 224.8 billion won.

Sales from providing telecom services to corporate clients climbed 7.1 percent to 519.7 billion won, thanks to rising data traffic and a consequent hike in demand for network services.

Among all of KT’s businesses, the non-telecom B2B business which involves artificial intelligence and cloud technology saw the highest on-year growth of 10.5 percent, with revenue of 539.6 billion won.

“KT is achieving success in Digico businesses by leading Korea’s digital transformation and actively cooperating and partnering with Korea’s No.1 business operators,” said KT Chief Financial Officer Kim Young-jin during a conference call Thursday.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]