KT’s Q1 OP more than double on rise in IPTV, 5G subscribers

KT Corp., South Korea’s second-largest mobile operator, fared better than expected in the first quarter, when COVID-19 had crippled most businesses across the board, thanks to a jump in internet on-demand TV and 5G service sales during social distancing.

KT on Wednesday announced in a regulatory filing that its operating profit in the January-March period totaled 383.1 billion won ($312.8 million) on a consolidated basis, up 158.4 percent from the previous quarter but down 4.7 percent from the previous year. Sales dropped 5.9 percent on quarter to 5.83 trillion won, but remained nearly unchanged from a year ago.

It also managed to return to the black with a net profit of 226.6 billion won in the first quarter from a net loss of 6.8 billion won three months ago although it was 12.8 percent lower than a year ago.

KT shares ended 0.63 percent higher on Wednesday to 23,800 won.

The on-year decline in operating profit was mainly due to the poor business of its credit card and hotel units hit hard by the COVID-19 outbreaks that have kept consumers staying home. KT’s first-quarter operating income, however, beat the market consensus of 347.7 billion won thanks to the jump in revenue of 5G wireless service, internet protocol television (IPTV), and business-to-business businesses.

Sales at wireless business jumped 1.9 percent on year to 1.7 trillion won, KT said. Its wireless service revenue, in particular, reached 1.6 trillion won in the first quarter, up 2.2 percent from the same period a year ago despite a fall in roaming service usage due to a plunge in overseas travel demand. But the jump in the number of 5G subscribers more than offset the loss at roaming service business. The company said the wireless service sales in the first quarter were the highest quarterly result since the third quarter of 2017.

The number of mobile network operator subscribers such as mobile phones and Internet of Things newly added 181,000. Among them, the number of mobile phone subscribers increased 66,000, the highest tally since the first quarter of 2017. In particular, the number of 5G subscribers in the cited period reached 1.78 million.

KT’s fixed-line business posted 372.5 billion won in revenue, down 7 percent from the previous year. Its high-speed internet sales came to 502.5 billion won, up 0.5 percent from a year ago. The number of subscribers to KT’s high-speed internet reached 8.96 million in the first quarter, of which 5.57 million subscribers were those of Giga-internet.

IPTV sales also jumped 11.9 percent to 417.7 billion won over the same period. The number of IPTV subscribers reached 8.42 million in the January-March period, up 5.7 percent from a year ago.

KT’s business-to-business sales increased 8.2 percent to 674.8 billion won in the first quarter.

Sales of BC Card Co., its credit card unit, skid 7.7 percent in the first quarter from a year ago due to sluggish consumption amid COVID-19 outbreak. Its real estate development unit also reported an 8.4 percent drop in revenue during the cited period amid a decline in the number of foreign travelers.

KT’s contents business, meanwhile, which manages Genie Music, saw a 12 percent increase in sales.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]