KT(US:KT)2024-11-09 00:25Financial Data and Key Metrics Changes - The group's total consolidated revenue slightly decreased on a year-over-year basis to KRW6,654.6 billion due to weak performance of the content subsidiary despite growth in core businesses such as real estate, IDC, and cloud [10] - Consolidated operating income increased by 44.2% to KRW464.1 billion, driven by the base effect from wage negotiations in the previous year [11] - Net income rose by 32.9% to KRW383.2 billion, supported by the growth of operating income [12] - EBITDA increased by 13.4% to KRW1,428.9 billion [12] - Operating expenses decreased by 2.9% year-over-year to KRW6,190.5 billion due to reductions in labor costs, SG&A, and cost of service [12] - As of September 2024, the debt ratio was 122.8%, and the net debt ratio decreased by 8.2 percentage points year-over-year to 30.3% [13] Business Line Data and Key Metrics Changes - Wireless revenue increased by 1.9% year-over-year to KRW1,740.4 billion, with 5G subscribers making up 76% of total handset subscribers [14] - Broadband revenue grew by 0.4% year-over-year to KRW618.5 billion, supported by an increase in Giga subscribers [15] - Media business revenue decreased by 1.2% year-over-year due to declines in PPV and advertising revenue, despite net growth in IPTV subscribers [16] - B2B service revenue grew by 2.5% year-over-year, driven by demand for AX services [17] - BC Card revenue decreased by 6.5% year-over-year to KRW931.4 billion, while operating income improved due to better management of financial assets [18] - The content subsidiary experienced a 19.3% year-over-year decline in revenue due to a shrinking market [19] - KT Cloud revenue grew by 6.8% year-over-year, benefiting from higher IDC utilization and stronger retention of public sector customers [19] - KT Estate revenue increased by 3.6% year-over-year, driven by lease revenue from offices and hotels [20] Market Data and Key Metrics Changes - The company is focusing on transforming into an AICT company and has established a strategic partnership with Microsoft to enhance capabilities in AI and cloud services [5][4] - The mid-term target is to reach a consolidated ROE of 9% to 10% by 2028, with plans to triple AI and IT business revenue compared to 2023 [8] Company Strategy and Development Direction - The company aims to innovate core businesses through AICT transformation and expand customized offerings in the B2B segment [4] - Plans include merging KT NXR, a subsidiary specializing in big data, and establishing two new subsidiaries focused on network services [7] - The company is committed to a mid-term plan to boost shareholder and corporate value, including a share buyback and cancellation program of KRW1 trillion [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the ambitious nature of the ROE target and outlines three strategies to achieve it: transformation into an AICT company, enhancing asset efficiency, and utilizing excess cash for investments and shareholder returns [26][28] - The company anticipates significant growth in the AI and cloud sectors, driven by partnerships and evolving technology [46] Other Important Information - A cash dividend of KRW500 per share was declared for Q3, with a commitment to a stable shareholder return program [9] - The company is undergoing workforce reassignment, with 1,700 employees moving to newly established subsidiaries [43] Q&A Session Summary Question: Regarding the ROE target and share buyback program - Management explained the ambitious ROE target and outlined strategies for achieving it, including transformation into an AICT company and enhancing asset efficiency [26][28] - The share buyback program will be implemented gradually across the years [29] Question: About the AX subsidiary and its services - The AX subsidiary will focus on technological consulting services, with an expected initial workforce of around 100 employees [38] - The company is still in the development phase and cannot provide specific details on services yet [34] Question: Strategies for tripling AI and IT revenue and workforce reassignment - The company plans to transform into a B2B AI DX service company, with a target of increasing AI IT revenue significantly by 2028 [42] - The reassignment process is nearly complete, with a total of 4,500 employees expected to be reduced from the headcount [43]