KT CEO Park Yoon-young speaks during a press conference on the telecom’s AX Platform Company business strategy at Pullman Ambassador Seoul Eastpole in Gwangjin District, eastern Seoul, on July 6.NEWS1
KT's quarterly operating profit extended a losing streak as costs related to the fallout from last year’s user data breach continued to weigh on its core businesses.
The company's second quarter operating profit fell 36.1 percent on year to 648.3 billion won ($457.3 million) on a consolidated basis, according to the company on Wednesday. Revenue fell 10.1 percent on year to 6.68 trillion won in the same period, while net profit declined 34.5 percent to 480.6 billion won.
On a standalone basis, the telecom posted operating profit of 389 billion won, down 17 percent during the same period.
KT’s core wireless business took a particularly heavy hit.
Wireless service revenue fell 1.8 percent as the company ran customer compensation programs for the breach from February through July. KT waived cancellation fees, and users switched to other service providers.
There were signs of improvement, however. KT’s wireless subscriber cancellation rate, which had risen to 1.7 percent in the first quarter, fell to 0.9 percent in the second quarter.
Revenue from the enterprise business declined 2.3 percent from a year earlier but increased 3.3 percent from the previous quarter. Revenue from the company’s AX, or AI transformation, business jumped 22.3 percent on year to 367.8 billion won, driven by its AI and cloud businesses.
A pedestrian passes by a KT sign in the Gwanghwamun area in central Seoul on July 30.NEWS1
“The on-year decline in revenue was due to the base effect from a large development project last year,” a KT source said, referring to development gains from the company’s headquarters development project in Gwangjin District, eastern Seoul.
KT also struggled the previous quarter. The company posted operating profit of 482.7 billion won as costs related to its response to the security breach and an unfavorable base effect weighed on earnings.
“Second quarter operating profit actually increased slightly on year when excluding the one-time gain included in last year’s figure,” a KT source said.
KT aims to achieve a return on equity of 9 to 10 percent by 2028 on a consolidated basis, which includes KT and its subsidiaries. The company plans to strengthen cybersecurity under a “zero trust” model, which requires users and devices to be continuously verified, while exiting low-profit businesses and monetizing noncore assets to reach the target.
The company will pay a second quarter dividend of 600 won per share on Thursday.
A Personal Information Protection Commission official announces a fine for KT for a customer data breach in a press conference in Jongno District, central Seoul, on July 30.YONHAP
More than 16,600 users’ personal information, such as phone numbers and mobile device identification numbers, was leaked in the data breach, which was first reported by the telecom in September of last year, according to regulators.
The leaked information was then used to carry out unauthorized transactions that resulted in a total loss of 240 million won for 368 victims.
The Personal Information Protection Commission fined the wireless carrier 53.9 billion won in July.
BY KIM MIN-JEONG [lee.jiwon10@joongang.co.kr]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
