April 26, 2024

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[THE INVESTOR] South Korea’s largest telcom company KT Corp. said on Feb. 1 that it posted 1.44 trillion won (US$1.24 billion) in operating profit last year, a record high since 2011, thanks to reduced costs and growth in mobile and wireless internet services.

The firm’s operating profit in 2016 rose 11.4 percent from the previous year, while annual revenue climbed 2.1 percent to 22.74 trillion won. Compared to 2013, operating income surged more than 70 percent. Analysts attributed the improvement to KT’s all-out efforts to reduce costs during the years.

 

KT Corp. CEO Hwang Chang-gyu

Since taking the helm of the telecom firm in 2014, CEO Hwang Chang-gyu has led cost reduction based on extensive restructuring that involved asset sales and lay-offs. 

Of  last year's annual sales, KT earned 7.4 trillion won from the wireless business, which incorporates mobile services.
The firm’s mobile subscribers grew 850,000 to 18.9 million, among which 75.5 percent are using the Long Term Evolution services. Mobile plans tailored for certain age groups such those in their teens and early 20s boosted profits, according to the KT.

The fixed-lined business, including the landline phone and fiber-optic internet services, however, continued to decline due to the decreasing landline subscribers. The segment saw sales fall 1.8 percent to 5.06 trillion won. Its revenue in 2015 dropped 6.8-percent year-on-year.

The media and content business, which includes IPTV services, earned 1.93 trillion won in sales, up 15.8 percent from a year earlier.
The number of subscribers for the IPTV services exceeded 7 million last year.

Subsidiaries including BC Card, KT Skylife and KT Estate posted a combined operating profit of 340 billion won, accounting for a fourth of KT's revenue.

“We will try to secure new growth engines while coming up with measures to further reduce costs to improve performance down the road,” said Shin Kwang-seok, chief financial officer of KT. 

Meanwhile, the firm's CEO was recently permitted a second term despite allegations that he had offered favors to President Park Geun-hye's embattled confidante Choi Soon-sil.

By Kim Young-won (wone0102@heraldcorp.com)