KT's Q2 Operating Profit Falls 14.3% Due to Rising Labor Costs (Update)

2024 Q2 Earnings Announcement
Wireless Sales 1.7 Trillion KRW... 2.5% Increase
Enterprise Service Sales Decrease by 1.0%

KT's operating profit for the second quarter of this year was 494 billion KRW, a 14.3% decrease compared to the same period last year.

Kim Young-seop, CEO of KT

KT announced on the 9th that its consolidated sales for the second quarter of 2024 were 6.5464 trillion KRW, similar to last year, while operating profit decreased by 14.3% to 494 billion KRW.

Regarding the decline in operating profit, KT stated that the costs reflected were due to wage negotiations. Labor costs in operating expenses for the second quarter were 1.2132 trillion KRW, a 7.2% increase compared to the second quarter of last year.

Excluding the 64.4 billion KRW in costs related to the wage negotiation results, KT said that consolidated operating profit decreased by 3.1% year-on-year, while separate operating profit increased by 3.9%.

Wireless business revenue was 1.7651 trillion KRW, up 2.5% compared to the same period last year. In particular, the number of 5G subscribers surpassed 10 million, and wireless service revenue grew 2.7% due to expansion in roaming and budget phone businesses.

Revenue from wired sectors such as internet, media, and landline phones was 1.3166 trillion KRW, down 0.3% from the second quarter of last year. Especially, home landline phone revenue decreased by 7.8%, and the number of IPTV subscribers declined to 9.423 million from 9.47 million in the second quarter of last year.

The enterprise services business saw a 1.0% decrease in revenue year-on-year due to structural improvements in low-profit businesses such as solar energy, digital logistics, and healthcare, despite growth in corporate internet, corporate messaging, and AICC (AI Customer Center) businesses.

However, sales from the five major growth businesses within the enterprise services sector?AICC, Internet of Things (IoT), smart mobility, smart spaces, and energy?reached 96 billion KRW, achieving a 10.3% growth compared to the same period last year.

In June, KT signed a strategic partnership with Microsoft (MS) to transform into an AICT company. KT plans to collaborate comprehensively with MS in AI, cloud, and IT fields.

Jang Min, KT CFO (Executive Vice President), stated, "To make a full-fledged leap as an AICT company, we will improve our business structure and expand comprehensive cooperation with global IT companies."