[Click eStock] "KT 2Q Earnings Expected to Exceed Consensus"

Meritz Securities forecasted on the 9th that KT's second-quarter earnings would exceed market consensus.

The consolidated sales for the second quarter are expected to be KRW 6.6756 trillion, with an operating profit of KRW 554.9 billion. Separate operating profit is projected at KRW 415.4 billion. The number of 5G subscribers is estimated at 10.25 million (penetration rate of 75.5% compared to handset subscribers), and the wireless average revenue per user (ARPU) is estimated at KRW 34,317. Although the separate sales for the second quarter grew by only 1.6% year-on-year, it was analyzed that the profitability improvement trend continued due to the low-profit business rationalization strategy that started in the second half of last year. The consolidated subsidiary performance is expected to record a combined operating profit of KRW 139.5 billion, despite sluggish results from Nasmedia and Skylife, as KT Cloud and KT Estate businesses continue to perform well.

For 2024, consolidated sales and operating profit are projected at KRW 26.9711 trillion and KRW 1.7692 trillion, respectively. Separate operating profit is expected to be KRW 1.2673 trillion, with 5G subscribers reaching 10.83 million (penetration rate of 79.8%) and wireless ARPU at KRW 34,239 by the end of the year. The combined operating profit of consolidated subsidiaries in 2024 is forecasted to increase by 5.6% year-on-year to KRW 501.9 billion. BC Card and K Bank are expected to achieve stable profit growth this year after K Bank set aside a large provision of KRW 300 billion last year. KT Cloud and KT Estate are also expected to continue high growth of 16.9% and 8.9% year-on-year, respectively. Researcher Jeong Jisoo of Meritz Securities stated, "The expected dividend per share (DPS) for 2024 is KRW 2,000, which corresponds to an expected dividend yield of 5.5% based on the current stock price. However, since the performance of the Gwangjin-gu Advanced Business Complex will be temporarily reflected in the first quarter of next year, there is a high possibility that a one-time profit exceeding KRW 300 billion will be used as a resource for shareholder returns, which will support the downside of the stock price."