KT (030200) Q3 2024 earnings summary

Executive summary

• Strategic transformation underway to become an AICT company, focusing on sustainable growth, B2B expansion, and supported by workforce restructuring and new subsidiaries.

• Announced a five-year strategic partnership with Microsoft to jointly develop AI/cloud services, foster AI talent, and accelerate AICT transformation.

• Launched a value-up program targeting a consolidated ROE of 9–10% by 2028, with plans to triple AI/IT revenue and implement a ₩1 trillion share buyback between FY2025–2028.

• 3Q24 quarterly dividend of ₩500 per share, with cumulative DPS at ₩1,500, and commitment to stable shareholder returns.

Financial highlights

• Consolidated revenue for Q3 2024 slightly decreased year-over-year to ₩6.6546 trillion due to weak content subsidiary performance, while separate revenue grew 2.0% to ₩4.765 trillion.

• Operating income surged 44.2% year-over-year to ₩464.1 billion, driven by the base effect from prior wage negotiations and improved core business profitability.

• Net income rose 32.9% to ₩383.2 billion; EBITDA increased 13.4% to ₩1.4289 trillion, with EBITDA margin up 2.7 percentage points to 21.5%.

• Operating expenses declined 2.9% year-over-year to ₩6.1905 trillion due to lower labor, SG&A, and service costs.

Outlook and guidance

• Aims to triple AI/IT revenue by 2028, targeting ₩3 trillion and increasing the share of these businesses from 6% to 19%.

• Plans to achieve a consolidated operating profit margin of 9% and a consolidated ROE of 9–10% by 2028.

• Shareholder return policy includes a minimum DPS and a gradually increasing share buyback and cancellation program totaling ₩1 trillion between FY2025–2028.

• Plan to liquidate non-core assets, including idle real estate.