KT records major turnaround in 2015
By Lee Min-hyung
Hwang Chang-gyu KT chairman
KT generated 1.29 trillion won ($1.07 billion) in operating profit last year, achieving a major turnaround from an operating loss a year ago.
This is the first time the country’s No. 2 mobile carrier has topped 1 trillion won in yearly operating profit since 2012.
As company chief Hwang Chang-gyu starts his last year as chairman, KT plans to put more focus on finding new revenue streams from overseas markets.
“The first year when Hwang took the top position, he tried to help the company with a leaner structure by launching a big-scale cut-off campaign in the workforce,” a company spokesman said Friday. “He turned KT around to report a profit. Now, his mission is to boost corporate brand awareness in international markets.”
Last year’s sales were 22.28 trillion won, down 0.1 percent from a year ago, but net income in 2015 swung to 631.28 billion won from an operating loss, KT said in a regulatory filing to the Korea Exchange (KRX).
During the fourth quarter last year, KT posted 267.2 billion won in operating profit, up 1,529 percent year-on-year.
KT said the steep growth was thanks to increased sales in the wireless network business, which posted 7.37 trillion won in yearly sales, up 3.4 percent from a year ago.
It had some 12.8 million users for its long-term evolution (LTE) network service out of the nation’s population of more than 51 million, as of last year, according to the telecom.
Its average revenue per user (ARPU), a key indicator of a mobile carrier’s profitability, rose 0.8 percent to 36,491 won in the fourth quarter, on a quarterly basis, the company said. KT said the growth is due to the company’s rich LTE-based optional services.
“KT could improve its profitability with major achievements in our key businesses and cost reductions in our corporate structure,” KT Chief Financial Officer (CFO) Shin Kwang-suk said. “We aim to keep improving our growth and profitability by making achievements in our next-generation businesses in the telecommunications sector.”
However, sales in the company’s wired network business fell 6.9 percent to 5.15 trillion won last year, compared with the previous year. Falling demand for wired telephone services has led the sales decline, the company said.
The company also posted 3.41 trillion won in yearly sales in its financial business, up 5.9 percent from a year ago. The performance is attributable to improved sales in its card subsidiary, BC Card.
Sales for its media and content business reached 1.66 trillion won last year, up 10.2 percent from the previous year. The company said it has obtained more than 6.5 million subscribers for its Internet protocol television (IPTV) service as of last year. KT is the market leader in the nation’s IPTV industry. The company said it will diversify its revenue streams by forging ties with key affiliates, including broadcasting service operator KT Skylife.
This year, KT plans to accelerate its strong drive for next-generation growth areas ― including smart energy solutions, health care and new media business. The company aims to generate more revenue by expanding the new businesses into the Internet of Things (IoT), online-to-offline (O2O) and the financial technology sector, it said.