KT (030200) Q2 2024 earnings summary

Executive summary

• Focused on growth and structural profitability improvement, guided by the AICT vision in H1 2024, with ongoing transformation and expansion into AI, cloud, and digital transformation.

• Entered a strategic partnership with Microsoft to collaborate on AI, cloud, and IT, aiming to lead the Korean market in Sovereign Cloud and AI.

• Continued streamlining and restructuring of low-margin businesses, including rationalization of solar energy, digital logistics, healthcare, and B2B segments.

• Major subsidiaries, especially real estate, IDC, and cloud, continued to deliver strong growth.

• The group is not classified as a small or medium enterprise and maintains robust credit ratings (domestic AAA, international A3/A-/A).

Financial highlights

• Consolidated revenue for Q2 2024 was KRW 6,546.4 billion, flat year-over-year; H1 2024 consolidated revenue was ₩13,200,973 million, up from ₩12,991,197 million in H1 2023.

• Operating profit for Q2 2024 declined 14.3% year-over-year to KRW 494 billion, mainly due to early wage agreement; H1 2024 operating income was ₩1,000,486 million.

• Net income for Q2 2024 fell 5.1% year-over-year to KRW 410.5 billion; H1 2024 net income attributable to owners was ₩768,555 million.

• EBITDA for Q2 2024 was KRW 1,460.2 billion; EBITDA margin was 22.3%, down 0.7 percentage points year-over-year.

• Operating expenses rose 1.4% year-over-year to KRW 6,052.4 billion, mainly from a 7.2% increase in labor costs.

Capital allocation and financing

• Debt-to-equity ratio at June 2024 was 127.3%; net debt-to-equity ratio improved to 33.5%, down 11.1 percentage points year-over-year.

• Cumulative CapEx for KT and affiliates reached KRW 1,335 billion; standalone CapEx at KRW 960.9 billion.

• Cash and cash equivalents increased 109.7% year-over-year to KRW 3,786.7 billion at June 30, 2024.

• Cancelled 5.14 million treasury shares (2% of total) and declared Q2 cash dividend of KRW 500 per share.

• Strong credit ratings (domestic AAA, international A3/A-/A) support low-cost funding.