KT(US:KT)2021-05-11 21:31Financial Data and Key Metrics Changes - Consolidated revenue increased by 3.4% year-on-year to KRW 6,029.4 billion, while operating profit rose by 15.4% to KRW 444.2 billion [6][14] - Net profit surged by 43.7% year-on-year to KRW 326.5 billion, and EBITDA increased by 3.7% to KRW 1,345.3 billion [14] - Operating expenses grew by 2.5% year-on-year to KRW 5,585.2 billion due to higher business-related and sales expenses [14] Business Line Data and Key Metrics Changes - Wireless revenue grew by 2% year-on-year to KRW 1,770.7 billion, with wireless service revenue up 2.2% to KRW 1,667.6 billion, driven by steady 5G subscriber growth [15] - Fixed line telephony revenue decreased by 0.3% to KRW 377.3 billion, while broadband Internet revenue slightly increased by 0.1% to KRW 503.2 billion [16][17] - IPTV revenue rose by 6.8% year-on-year to KRW 446.2 billion, and B2B revenue increased by 2.3% to KRW 684.2 billion [17] Market Data and Key Metrics Changes - The company reported a market share of 1 in quarterly net additions with broadband Internet subscribers increasing by more than 100,000 [11] - 5G subscribers reached 4.4 million, accounting for 31% of the total handset subscriber base [15] Company Strategy and Development Direction - The company aims to transition into a digital company (Digico) and expects consolidated revenue to exceed KRW 25 trillion in 2021, with a stand-alone service revenue growth target of above 4% year-on-year [21] - KT is focusing on expanding its platform businesses and enhancing synergies across group affiliates, including investments in digital transformation services [12][21] Management's Comments on Operating Environment and Future Outlook - Management attributed the strong performance to growth in core businesses, AI and DX, and improved results from affiliates [23] - The company anticipates continued growth in digital platform-based businesses and aims to improve cost efficiencies for year-on-year operating profit improvement [26] Other Important Information - The company plans to make strategic equity investments in Banksalad, an asset management service application, to bolster competitiveness in finance and telecom [12] - CapEx for Q1 was KRW 289.4 billion, reflecting ongoing investments in growth areas [14] Q&A Session Summary Question: Assessment of Q1 performance and reasons for slowing PSTN erosion - Management highlighted strong results from core businesses and growth in AI and DX as key factors for good performance, along with increased 5G and premium subscriber acquisition [23][24] - Slowing PSTN erosion was attributed to growth in enterprise Internet-based telephony and the introduction of flat rate tariff products [26][27] Question: Projections for group affiliates impacted by COVID - Management expects a slight dip in overall revenue for KT Estate due to the end of one-off sales-related revenues, while BC Card is seeing recovery in domestic acquiring volumes [31][32] - Skylife is experiencing subscriber growth in satellite services, and management is optimistic about future performance from media and advertisement-related affiliates [33][34] Question: Guidance for wireless business growth and dividend payout ratio - The company maintains its guidance of 4% growth for wireless service revenue, citing increasing 5G penetration and high ARPU subscribers [38] - Management confirmed the commitment to a 50% payout ratio based on adjusted net profit, as previously communicated [39] Question: Achievement of operating profit target and treasury shares - Management stated that the plan is to achieve higher operating profit year-on-year and will reassess the target for 2022 based on performance [42] - The use of treasury shares is under review, with potential applications in strategic alliances or M&As [43]