KT Corporation ((KT)) has held its Q2 earnings call. Read on for the main highlights of the call.
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KT Corporation’s recent earnings call conveyed a positive sentiment, highlighting robust revenue and profit growth. The company’s strategic transformation into an AICT entity and successful AI initiatives have significantly contributed to its strong financial performance, despite facing some challenges in specific segments like BC Card.
Strong Financial Performance
KT Corporation reported a remarkable financial performance with operating revenue increasing by 13.5% year-over-year to KRW 7,427.4 billion. Operating profit saw an impressive rise of 105.4% year-over-year, reaching KRW 1,014.8 billion. The company’s net income also grew by 78.6% year-over-year to KRW 733.3 billion, primarily driven by higher operating profits.
AICT Transformation and AI Initiatives
KT is actively transforming into an AICT company, having launched its proprietary LLM, Mi:dm2.0, and collaborating with Microsoft on AI initiatives. The company has secured AI platform build projects from large organizations, including the Gyeonggi provincial government and Korea Water Resources Corporation, showcasing its growing influence in the AI sector.
Dividend and Shareholder Returns
In a move to reward its shareholders, KT increased its dividend for the second quarter by 20% year-over-year to KRW 600 per share. Additionally, the company announced a share buyback plan amounting to KRW 250 billion, reflecting its commitment to enhancing shareholder value.
B2B and AI IT Business Growth
KT’s B2B service revenue posted a 4.5% year-on-year growth, while its AI IT business revenue grew by 13.8% year-over-year. This growth was driven by design and build projects and advancements in the cloud business, underscoring the company’s strategic focus on expanding its business-to-business and AI IT sectors.
KT Cloud and Content Subsidiaries
KT Cloud reported a 23% year-on-year revenue growth, fueled by increased data center usage and expanded DBO project wins. Meanwhile, the company’s content subsidiaries experienced a 6% year-on-year revenue growth, attributed to production and distribution expansion.
BC Card Revenue Decline
Despite the overall positive financial performance, BC Card revenue fell by 6.9% year-on-year to KRW 909.8 billion, primarily due to a decline in acquiring volume, highlighting a challenge within this segment.
Increased Operating Expenses
KT’s operating expenses rose by 5.9% year-over-year, reaching KRW 6,412.6 billion. This increase was largely due to higher costs of goods sold (COGS) from growing wireless handset sales.
Forward-Looking Guidance
Looking ahead, KT Corporation anticipates continued financial growth and strategic advancements. The company plans to invest KRW 1 trillion in information security over the next five years to enhance telecom service safety. With significant strides in AI and IT business revenues, KT is well-positioned to capitalize on its transformation into an AICT company.
In conclusion, KT Corporation’s earnings call reflected a positive outlook, driven by its strategic transformation and successful AI initiatives. The company’s strong financial performance and commitment to shareholder returns are key takeaways, despite challenges in certain segments like BC Card. KT’s forward-looking guidance suggests continued growth and investment in strategic areas, reinforcing its position in the market.