KT Submarine and LS Cable Accelerate Business Collaboration: "Expecting Growth Acceleration"

Expecting Performance Growth through LS Cable & System Business Participation and Asset Optimization

KT Submarine (KTS), which recorded a 43.2% sales growth last year, has reached a 'turning point' for sales expansion as it actively participates in LS Cable & System's business.

On the 22nd, the industry is anticipating synergy from the business cooperation between KTS and LS Cable & System. LS Cable & System holds a 16.2% stake in KTS and will become the largest shareholder if it exercises its call option between April and July. With LS Cable & System expanding its submarine cable business by securing supply rights worth over 1.2 trillion KRW in the UK, the US, Taiwan, and other regions, expectations are high that this will positively impact KTS's business as well.

KTS plans to actively participate in offshore wind farm construction and submarine connection projects in island regions, focusing on ASEAN countries such as Taiwan and Vietnam, in cooperation with LS Cable & System and LS Cable & System Asia. This strategy is expected to lead to an increase in KTS's sales in the future.

Last year, LS Cable & System signed a contract to supply HVDC cables worth a total of 640 billion KRW to two offshore wind farms in Norfolk, North Sea, UK. This is the largest contract ever won by a domestic cable company in Europe. The company is also intensifying its global market expansion in North America and Asia. Earlier last year, it signed a contract to supply submarine cables for offshore wind farms worth 350 billion KRW in North America, and in Taiwan, it has secured supply rights for submarine cables worth a total of 800 billion KRW over the past three years.

Lee Seung-yong, CEO of KTS, said, “We plan to actively enter the power business in addition to the existing submarine communication business by utilizing new laying vessels.” KTS purchased the largest submarine cable laying vessel in Korea, laying the foundation for business expansion. On the 21st of last month, KTS signed a participation contract for LS Cable & System’s ‘Jeju 3-Connection Submarine Cable Construction Project,’ formalizing business cooperation with LS Cable & System.

Meanwhile, KTS is experiencing sales growth amid the global expansion of submarine construction in the US, the Philippines, and other countries. Last year, sales reached approximately 42.8 billion KRW, a 43.2% increase compared to the previous year. This year, a return to profitability is also expected.

A KTS official said, “We plan to create growth momentum through cooperation with LS Cable & System, the second-largest shareholder this year,” adding, “We expect operating profit to turn positive as fixed costs decrease through asset efficiency.”