KT (030200) Q2 2024 earnings summary

Executive summary

• Revenue remained flat year-over-year at KRW 6,546.4 billion, while operating profit declined 14.3% due to higher labor costs from early wage settlements.

• Strategic partnership with Microsoft established to drive AI, cloud, and IT collaboration, aiming for leadership in the Korean Sovereign Cloud and AI market.

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

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

Financial highlights

• Consolidated revenue for Q2 2024 was KRW 6,546.4 billion, flat year-over-year; standalone revenue rose 1.4%.

• Operating profit declined 14.3% year-over-year to KRW 494 billion, mainly due to early wage agreement costs.

• Net income fell 5.1% year-over-year to KRW 410.5 billion; EBITDA margin was 22.3%, down 0.7 percentage points.

• Operating expenses rose 1.4% year-over-year, mainly from a 7.2% increase in labor costs.

• Service revenue slightly declined by 1.0% year-over-year, but sale of goods increased 7.9%.

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.

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