KT (030200) Q3 2024 earnings summary

Executive summary

• Pursuing transformation into an AICT company, focusing on AI and cloud innovation, B2B expansion, and workforce restructuring to support this transition.

• Strategic partnership with Microsoft to jointly develop Korean AI/cloud services, establish an AI-focused subsidiary, and accelerate AICT transformation.

• Announced a value-up program targeting a consolidated ROE of 9%-10% by 2028, tripling AI/IT revenue, and a KRW 1 trillion share buyback and cancellation program.

• 3Q24 quarterly dividend of KRW 500 per share, with cumulative DPS at KRW 1,500.

Financial highlights

• Q3 2024 consolidated revenue slightly decreased year-over-year to KRW 6.6546 trillion due to weak content subsidiary performance, while core businesses such as telco, real estate, and data center grew.

• Operating income rose 44.2% year-over-year to KRW 464.1 billion, driven by wage negotiation base effect, improved profitability, and core business growth.

• Net income increased 32.9% to KRW 383.2 billion; EBITDA margin improved to 21.5%, up 2.7 percentage points year-over-year.

• Operating expenses fell 2.9% year-over-year to KRW 6.1905 trillion, mainly from reduced labor and SG&A costs.

Outlook and guidance

• Plans to triple AI and IT business revenue by 2028, aiming for a consolidated operating profit margin of 9% and ROE of 9–10%.

• Shareholder return policy includes stable dividends, a gradually increasing share buyback and cancellation program through 2028, and liquidation of non-core assets.

• Focus on quality growth by improving profitability of low-profit businesses and expanding B2B AI DX services.