KT Skylife's 2Q Operating Profit Rises 0.4%... Net Profit Falls 22%

Q2 Operating Profit 23.3 Billion Won... 0.4% Increase YoY
Subscriber Net Increase Over 40,000 After HCN Acquisition

[Asia Economy Reporter Cha Min-young] KT Skylife posted operating results for the second quarter of this year that increased by 0.4% year-on-year, supported by the rise in advertising revenue on the ENA channel due to the hit drama "Extraordinary Attorney Woo." However, net profit for the period decreased by about 22% compared to the previous year.

KT Skylife announced on the 3rd that its consolidated operating profit for the second quarter was 23.3 billion KRW, up 0.4% from the same period last year. During the same period, sales increased by 45.2% to 254.2 billion KRW, while net profit decreased by 22.3% to 16.6 billion KRW. EBITA, an indicator of cash-generating ability, rose by 20.3% (8.7 billion KRW) year-on-year to 51.9 billion KRW. A KT Skylife official explained during a conference call that "marketing and network costs increased due to the expansion of Skylife internet and mobile subscribers," and "other administrative expenses increased due to higher HCN commerce costs and transmission agency fees."

Operating revenue from the platform segment of Skylife and HCN reached 233.6 billion KRW, up 45.2% year-on-year and 3.4% quarter-on-quarter. This was driven by increased sales in telecommunications services such as internet and mobile, as well as growth in HCN commerce sales and other revenues including transmission agency business.

Operating revenue from the content segment of Skylife TV surged to 20.6 billion KRW, up 46% year-on-year and 37.7% quarter-on-quarter. Advertising revenue significantly increased due to rising viewership ratings of the ENA and ENA PLAY channels, reaching a quarterly record high of 15.3 billion KRW.

The platform segment showed remarkable net subscriber growth. Combining Skylife satellite broadcasting and HCN cable broadcasting, there was a net increase of 25,000 subscribers. Adding 51,000 mobile subscribers and 26,000 sky internet subscribers, Skylife achieved a total net subscriber increase of 41,000. The launch of bundled products combining HCN cable TV and sky internet helped cable TV subscribers maintain net growth for two consecutive quarters.

Viewership ratings for the ENA channel also soared. Starting with "No Goo Pil-soo," the channel began airing original dramas, and ratings have been soaring with "Extraordinary Attorney Woo." With popular variety shows like "Dolsingles 3" combined, the ENA channel ranked first in the individual 20-49 age group ratings among all channels on the 28th of last month. KT Skylife explained that episode 9 of "Extraordinary Attorney Woo" recorded a nationwide pay-TV household rating of 15.8%, driving up the advertising revenue unit price for the ENA channel.

Yang Chun-sik, Head of Management Services at KT Skylife, said, “Following operating revenue of 240.8 billion KRW in the first quarter, we recorded 254.2 billion KRW in the second quarter, moving one step closer to joining the 1 trillion KRW annual sales club. We will further expand the net subscriber growth across all Skylife products and increase content investment to find the next 'Woo Young-woo,' completing a ‘comprehensive media content platform.’”