SK Telecom, KT post double-digit growth in Q1 OP on strong 5G, platform growth

[Photo provided by KT Corp.]

South Korea¡¯s top mobile carriers KT Corp. and SK Telecom Co. reported double-digit growths in their operating incomes for the first quarter against a year-ago period on lucrative businesses sprawling on 5G network.

According to its regulatory filing on Tuesday, KT delivered an operating profit of 444.2 billion won in the January-March period on a consolidated basis, gaining 174.7 percent from three months ago and 15.4 percent from a year earlier. The figure was the highest since the second quarter of 2017, hovering far above the market consensus of 390 billion won.

Net profit jumped 777.8 percent on quarter and 43.7 percent on year to 326.5 billion won even as sales fell 2.9 percent from a quarter ago, although adding 3.4 percent against the previous year to total 6.03 trillion won.

KT shares closed 3.57 percent higher at 30,500 won in Seoul trading on Tuesday.

KT¡¯s strong first-quarter results were driven by rapid growth of the AI/DX business and media/content business with improvements in its mainstay 5G and wireless businesses, the company explained.

Revenue from the AI/DX business rose 7.5 percent on year thanks to increased demand from IDC clients and its newly-built center in Yongsan.

Sales at the internet protocol television (IPTV) business gained 6.8 percent to 446.2 billion won.

The wireless business recorded a 2 percent growth in sales to 1.77 trillion won. The number of 5G service subscribers reached 4.4 million as of the end of March, accounting for 31 percent of the total subscribers.

Its fixed-line business saw a 0.3 percent decline in revenue in the first quarter, slowed from a year earlier. Sales from the high-speed internet however stayed the similar level at 503.2 billion won from the previous year.

[Photo provided by SK Telecom Co.]

On the same day, SK Telecom disclosed its consolidated operating profit for the first three months gained 17.41 percent on quarter and 29.04 percent on year to 388.8 billion won, beating the market consensus of 345.8 billion won.

Net profit soared 54.16 percent from a quarter ago and 86.95 percent from a year earlier to 572 billion won, while sales lost 1.22 percent on quarter but added 7.41 percent on year to total 4.78 trillion won.

SK Telecom shares ended 0.31 percent up at 319,500 won.

So-called new ICT business – media, security and commerce – drove the earnings growth. The non-wireless business raked in 310 billion won in operating profit, surging 64 percent from the previous year. Sales gained 16.7 percent on year to total 1.52 trillion won, contributing 31.8 percent to the total revenue.

The media business delivered 967 billion won in revenue, up 17.6 percent on year. Sales from the security business reached 350.5 billion won, and the commerce business 203.7 billion won.

The company¡¯s wireless business saw its revenue add 1.9 percent to 2.98 trillion won. Operating profit rose 19 percent to 310 billion won. The number of 5G service subscribers reached 6.74 million as of the end of March.

SK Telecom executed 165 billion won worth facility investment from January to March, down 46.2 percent from a year-ago period. For this year, the company is preparing capex plan for wireless and non-wireless communications infrastructure, similar to the scale of last year.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]