Operating profit decreased, but net increase in wireless subscribers was 220,000
Wired lines shrink, media and content see double-digit growth

KT recorded consolidated revenue of 5.8069 trillion won and an operating profit of 399.1 billion won in the second quarter of 2018.

Compared to the same period last year, sales decreased by 0.6% and operating profit decreased by 10.8%. Increased operating expenses, including higher marketing costs and one-time labor costs, contributed to the decline in operating profit. Compared to the previous quarter, sales, operating profit, and net profit increased by 1.7%, 0.5%, and 25.2%, respectively.

Under the old accounting standards applied until last year, sales increased by 0.7% year-on-year to 5.8824 trillion won, while operating profit recorded 376.9 billion won, a 15.7% decrease year-on-year due to increased marketing expenses.

When comparing the increase and decrease in sales by business in the second quarter with the second quarter of last year under the old accounting standards, sales in the wired business decreased, but the media and content sector continued to show double-digit growth and high-speed internet showed steady growth, driving sales.

Wireless service revenue recorded 1.7015 trillion won, a 0.7% decrease year-on-year and a 0.3% increase compared to the previous quarter, driven by a net increase of over 220,000 general mobile network operator (MNO) subscribers from April to June. In particular, the 'Data ON' rate plan, newly introduced last May, surpassed 500,000 subscribers within one month of its launch by increasing user benefits tailored to customers' data usage patterns.

Wired revenue was 1.1964 trillion won, down 2.4% from the same period last year. Although wired revenue continues to decline due to reduced usage, the rate of decline is slowing thanks to the growth of gigabit internet. As of the end of July, the number of gigabit internet subscribers exceeded 4.5 million, accounting for 52% of KT's total high-speed internet subscribers. Driven by the steady increase in gigabit internet subscribers, internet business revenue grew 3.7% year-on-year on a separate basis (excluding connection fees), continuing its growth trend for 12 consecutive quarters.

Revenue from the media and content business reached 604.2 billion won, a 7.6% increase compared to the same period last year, driven by the expansion of IPTV subscribers and the growth of subsidiaries such as Genie Music. In particular, on a separate basis, IPTV revenue was 361.9 billion won, a 17.2% increase compared to the same period last year, and the number of IPTV subscribers reached 7.67 million, a 5.4% increase compared to the same period last year.

Revenue from the financial business recorded 866.7 billion, partially recovering from the decline in China UnionPay card purchases. Revenue from other services increased by 1.9% year-on-year to 596.5 billion, driven by strong performance in the Internet Data Center (IDC) business.

KT CFO Yoon Kyung-keun stated, “We were able to achieve stable performance by expanding subscribers through service innovation in core businesses such as wireless, wired, and media,” adding, “In the second half of the year, we will foster new growth engines in platform business sectors based on innovative technologies such as AI and blockchain while preparing for the upcoming 5G era.”