KT net profit slips on year to ₩326.2 billion in third quarter

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KT net profit slips on year to ₩326.2 billion in third quarter

KT CEO Ku Hyeon-mo gives a speech on KT's ″Digico″ non-telecom business during an event celebrating the 20th anniversary of the company's privatization in August. [KT]

KT CEO Ku Hyeon-mo gives a speech on KT's ″Digico″ non-telecom business during an event celebrating the 20th anniversary of the company's privatization in August. [KT]

 
KT logged a lower-than-expected net profit of 326.2 billion won ($235 million) in the third quarter, down 3.4 percent on year.
 
The figure missed the analyst forecast of 345.9 billion won compiled by FnGuide.
 
KT explained that the growth downturn in the net is due to equity losses and the base effect from the previous year’s one-off earnings from its subsidiary selling real estate investment trusts.
 
The operating profit rose 18.4 percent to 452.9 billion won, beating the expectation of 441.5 billion won. Its sales came to 6.48 trillion won, up 4.2 percent, also above the forecast of 6.43 trillion won.
 
Non-telecom businesses — which KT refers to as its "Digico" units — and business-to-business (B2B) services pushed up the profit despite the inflation-driven operating cost increase, according to KT.
 
“We continued on with our transformation to become a digital platform company and made pre-emptive responses to the uncertain environment,” said KT Chief Financial Officer Kim Young-jin during an online conference call on Tuesday.
 
“As a result, we are seeing stronger growth and profitability from Digico and our B2B units.”
 
KT reported sales of 2.36 trillion won in the business-to-customer (B2C) telecom business, up 0.6 percent on year. 5G users took up 57 percent of KT’s total handset service subscribers, greater than the previous quarter’s 54 percent.
 
Sales from the enterprise telco business grew 9.5 percent to 546.4 billion won, due to rising data traffic. Corporate internet and data-related service sales stood at 369.6 billion won, up 10.9 percent.
 
The B2C Digico unit, which includes media-related businesses, saw a 3.6 percent increase in sales to 558.5 billion won, led by the IPTV business. KT rebranded its IPTV from Olleh TV to Genie TV in October.
 
Sales from the Digico business for enterprises, which includes enterprise IT services, declined 10.4 percent on year to 482.9 billion won despite a steep growth in its automated call center service business, due to the KT Cloud spinoff in April.
 
With KT Cloud’s sales, the B2B Digico unit’s sales figure totals 133.1 billion won, up 9.6 percent on year.
 
Moreover, KT’s content subsidiaries delivered a strong performance in the July-September period with a 24.7 percent increase in sales to 301.2 billion won, due to the success of KT Studio Genie’s hit legal drama “Extraordinary Attorney Woo."
 
KT Skylife, which is 49.99 percent owned by KT and operates cable channel ENA, saw a 50.3 percent jump in sales to 268.1 billion won.
 
Meanwhile, KT recently got approval from the Fair Trade Commission for the merger of its Seezn video streaming service with CJ ENM’s Tving in July. Seezn will be merged into Tving by Dec. 1.
 
LG U+, the third largest telecom company in Korea, reported a lower-than-expected net of 170.8 billion won, down 19.1 percent on year, on Nov. 4. The operating profit grew 3 percent to 285.1 billion won, and sales came out at 3.5 trillion won, up 0.7 percent.
 
SK Telecom will announce its quarterly performance on Thursday.

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