• Consolidated Revenue: KRW26,431.2 billion, a historical record since going public in 1998.
• Operating Profit: KRW809.5 billion, down 50.9% year-on-year due to one-off labor costs.
• Adjusted Operating Profit: KRW1,811.8 billion, up 9.8% year-on-year when excluding one-off impacts.
• Net Profit: KRW450.1 billion, down 54.5% year-on-year.
• EBITDA: KRW4,687.2 billion, down 14.2% year-on-year.
• Operating Expense: KRW25,621.7 billion, up 3.6% year-on-year.
• Debt to Equity Ratio: 132.3% as of December 2024.
• Net Debt to Equity Ratio: 37.7%, a decrease of 1.9 percentage points year-on-year.
• Total CapEx: KRW3,123.4 billion for 2024.
• Wireless Revenue: KRW6,959.9 billion, up 1.3% year-on-year.
• Internet Revenue: KRW2,486.9 billion, up 1.1% year-on-year.
• Media Business Growth: 1.2% year-on-year growth in IPTV subscribers.
• Home Fixed Line Telephony Revenue: KRW699.4 billion, down 7.3% year-on-year.
• B2B Revenue Growth: 2.9% year-on-year increase.
• AI IT Business Revenue: 11.9% year-on-year increase.
• BC Card Revenue: KRW3,805.8 billion, down 5.4% year-on-year.
• KT Skylife Revenue: KRW1,022.9 billion, down 1.5% year-on-year.
• KT Cloud Growth: 15.5% year-on-year increase.
• Dividend Per Share (DPS): Increased from KRW1,961 in 2023 to KRW2,001 in 2024.

• Warning! GuruFocus has detected 5 Warning Signs with KT.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• KT Corp (NYSE:KT) achieved a historical record in consolidated revenue, reporting KRW26,431.2 billion, the highest since going public in 1998.
• The company entered a strategic partnership with Microsoft to transform into an AICT company, focusing on structural profitability improvements.
• KT Corp (NYSE:KT) reported a 9.8% year-on-year increase in operating profit, excluding one-off impacts, indicating stronger fundamentals.
• The company plans to launch Korea-specialized AI models and secure public cloud services in partnership with Microsoft, aiming for B2B AX business growth.
• KT Corp (NYSE:KT) increased its annual dividend per share from KRW1,961 in 2023 to KRW2,001 in FY24, reflecting a shareholder-friendly management policy.

Negative Points

• Operating profits fell 50.9% year-on-year due to one-off labor costs from workforce restructuring.
• Net profits declined 54.5% year-on-year to KRW450.1 billion, impacted by decreased operating profits.
• Operating expenses increased by 3.6% year-on-year, driven by workforce revamping and higher depreciation.
• BC Card revenue decreased by 5.4% year-on-year due to a decline in acquiring volume.
• KT Skylife revenue fell by 1.5% year-on-year, affected by pay TV subscriber declines.

Q & A Highlights

Q: Can you provide guidance on KT Corp's 2025 revenue, profit, and shareholder return, and when will revenue from the real estate development be recognized? A: Min Jang, CFO, stated that revenue from the real estate development will be recognized in Q1 and Q2 as people move into the apartments starting in March. For 2025, KT Corp's consolidated revenue target is above KRW28 trillion. While specific profit figures were not disclosed, the company expects improvements from structural changes and AICT business expansion. Shareholder returns will be determined based on profit improvements, with a mix of cash payouts and share buybacks to be decided in upcoming board meetings.

Q: What is KT Corp's strategy for its business process innovation solutions and partnership with Microsoft? A: Min Jang, CFO, explained that KT's AICT transformation focuses on B2B, B2C, and media businesses, with AI capabilities driving innovation. The B2B IT services are AI-powered, aiming for double-digit growth in 2025. The partnership with Microsoft will launch a Korea-specialized secure public cloud in Q1 and an AI model based on GPT-4 in Q2. KT is strengthening its consulting capabilities and focusing on strategic customers to drive growth.

Q: What are KT Corp's future CapEx plans, and how will they impact shareholder returns? A: Min Jang, CFO, stated that CapEx will remain at 2024 levels, with no significant 5G or 6G investments expected soon. The company is focusing on AICT business growth and IT scaling. Shareholder returns will be guided by profit improvements, with a plan to buy back and cancel KRW250 billion of treasury shares annually until 2028, subject to board approval.

Q: What cost savings resulted from KT Corp's workforce reorganization, and how will dividend inflows from subsidiaries be used? A: Min Jang, CFO, noted that 4,400 employees were affected by the reorganization, with 2,700 retiring and 1,700 transferring to a subsidiary at reduced wages. These changes are expected to result in labor cost savings. Dividend inflows from subsidiaries will be included in net profit and can be used for shareholder dividends, with adjustments made for non-cash items to smooth profit fluctuations.

Q: How does KT Corp plan to enhance shareholder value and manage share buybacks? A: Min Jang, CFO, emphasized that KT Corp will implement its value enhancement plan by improving profitability and facilitating shareholder returns. The company plans to cancel KRW250 billion of treasury shares annually, with adjustments based on profit growth and market conditions. The specifics will be decided in board meetings, considering foreign ownership limits and corporate value maintenance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.