KT Posts Q2 Operating Profit Over 1 Trillion Won in Earnings Surprise, Doubles Year-on-Year

Achieving Over 1 Trillion Won in Quarterly Operating Profit for the First Time
Second Quarter Revenue Reaches 7.4274 Trillion Won, Operating Profit Hits 1.0148 Trillion Won
Growth Driven by Gangbuk Headquarters Site Sale, Alongside AI and Cloud Expansion

KT posted a surprise performance in the second quarter of this year, surpassing 1 trillion won in operating profit.

On August 11, KT announced in a regulatory filing that its consolidated operating profit for the second quarter of this year was provisionally tallied at 1.0148 trillion won, a 105.4% increase compared to the same period last year. Revenue during the same period rose 13.5% to 7.4274 trillion won.

KT logo.

This is the first time KT's quarterly operating profit has exceeded 1 trillion won. KT explained that this achievement reflects the growth of its core businesses, such as telecommunications and AI transformation (AX), as well as one-off real estate sales profits from the development of the Gangbuk headquarters site.

Excluding subsidiaries, KT's standalone revenue and operating profit for the second quarter were 4.7728 trillion won and 468.7 billion won, respectively. Compared to the same period last year, revenue increased by 4.9% and operating profit by 30.6%.

Breaking down the second quarter results by business segment, wireless service revenue rose 1.6% year-on-year to 1.7817 trillion won. This was due to a net increase in number portability subscribers and an expanded 5G subscriber base. As of the second quarter of this year, 5G subscribers accounted for 79.5% of KT's total handset subscribers.

Wired business revenue was 1.3345 trillion won, up 1.4% from the same period last year. In May, KT became the first in Korea to surpass 10 million subscribers for its high-speed internet service, with related revenue increasing 2.1% year-on-year.

Despite a decline in video-on-demand (VOD) revenue, the media business saw a 0.8% year-on-year increase in revenue, driven by a greater net increase in IPTV subscribers and higher usage of premium plans. Enterprise service revenue grew 4.5% year-on-year as telecommunications and AI·IT businesses expanded. In particular, the AI·IT sector grew 13.8% year-on-year, supported by strong performance in design & build and cloud businesses.

KT Group affiliates also delivered solid results. First, KT Cloud saw a 23.0% year-on-year increase in revenue as both its data center (DC) and cloud businesses grew. KT Estate, the real estate subsidiary, recorded a 2.0% year-on-year increase in revenue, driven by growth in its office and hotel leasing segments. The hotel segment, in particular, benefited from holiday demand and a strategy focused on premium rooms.

In the financial sector, BC Card maintained operating profit at a similar level to the same period last year by strengthening its profitability strategy. Internet-only bank K Bank surpassed 14 million customers as of the end of June. Its deposit balance rose 22.5% year-on-year to 26.8 trillion won, while its loan balance increased 10.8% to 17.4 trillion won.

Starting in the third quarter of this year, KT plans to fully launch its AX business based on its independently developed large language model (LLM) "Mi:um 2.0" and global partnerships. According to its AI multimodal strategy roadmap, KT will sequentially introduce Mi:um 2.0, state-of-the-art (SOTA) models from global companies, and GPT models developed in collaboration with Microsoft (MS).

In addition, KT has been selected as Palantir's first premium partner in Korea and plans to provide services optimized for the Korean market by combining KT's cloud and network infrastructure with Palantir's core solutions.

Furthermore, KT plans to invest more than 1 trillion won in information security over the next five years to strengthen its security capabilities.

KT has set its second quarter dividend for this year at 600 won per share, a 20% increase from the same period last year. The dividend will be paid on August 14. Starting this quarter, KT has introduced a "pre-dividend, post-investment" policy, under which the dividend amount and payout are disclosed in advance. The 250 billion won share buyback, which was promoted as part of the value-up program announced in November last year, is scheduled to be completed on August 13.

Jang Min, KT's Chief Financial Officer (CFO), stated, "We were able to achieve a significant improvement in performance thanks to the solid growth of our core telecommunications business and the results from our key group portfolio. Going forward, we will accelerate our transformation into an AICT company to achieve sustainable growth and faithfully implement our value enhancement plans to further elevate KT's value."