Financial Data and Key Metrics Changes - Consolidated revenue for FY 2024 reached KRW 26,431.2 billion, marking a historical record since the company went public in 1998, with a year-on-year increase of 0.2% [7][14] - Operating profit fell 50.9% year-on-year to KRW 809.5 billion, but adjusted for one-off impacts, it increased 9.8% year-on-year to KRW 1,811.8 billion [8][14] - Net profit decreased by 54.5% year-on-year to KRW 450.1 billion, while EBITDA declined 14.2% year-on-year to KRW 4,687.2 billion [14] - Operating expenses rose 3.6% year-on-year to KRW 25,621.7 billion due to increased one-off labor costs and higher depreciation [15] Business Line Data and Key Metrics Changes - Wireless revenue increased by 1.3% year-on-year to KRW 6,959.9 billion, with 5G subscribers exceeding 10.4 million, accounting for 77.8% of the total handset subscriber base [16][17] - Internet revenue grew by 1.1% year-on-year to KRW 2,486.9 billion, driven by an increase in GiGA Internet subscribers [18] - Media business revenue saw a 1.2% year-on-year growth, attributed to IPTV subscriber expansion [18] - B2B services revenue increased by 2.9% year-on-year, supported by solid growth in enterprise Internet and data business [19] - AI/IT business revenue rose by 11.9% year-on-year, driven by AICC expansion and a project in Thailand [20] Market Data and Key Metrics Changes - The content subsidiary's revenue fell by 13.6% year-on-year due to a contracting market, although some projects showed potential for future growth [22] - KT Cloud revenue grew by 15.5% year-on-year, supported by increased data center usage and cloud-based CDN traffic [22] Company Strategy and Development Direction - The company aims to transition into an AICT company by 2025, focusing on structural profitability improvements and innovation in workforce and business structure [6][9] - A strategic partnership with Microsoft is expected to enhance product offerings, including AI models specialized for Korea and secure public cloud services [10][36] - The company has set a revenue target of above KRW 28 trillion for FY 2025 [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of workforce innovation on operating profit and emphasized the importance of structural improvements for future profitability [8][30] - The company plans to maintain a minimum level of shareholder return while focusing on profit improvement and rationalization of underperforming businesses [31][51] Other Important Information - The company adopted a quarterly dividend policy, with a cumulative dividend of KRW 150 billion paid out up to Q3 2024, and an increase in annual DPS from KRW 1,961 in 2023 to KRW 2,001 in FY 2024 [12][13] - A share buyback and cancellation plan of KRW 1 trillion is set until 2028, with KRW 250 billion planned for this year [13][54] Q&A Session Summary Question: 2025 outlook for revenue, profit, and shareholder return - Management provided a revenue guidance of above KRW 28 trillion for 2025 and indicated that profit estimates would depend on structural improvements and revenue expansion from AICT initiatives [27][29] Question: Timing for recognizing profit from real estate development - Profit from the real estate development will start being recognized in Q1 and Q2 as residents move in starting March [28] Question: AX business strategy and Microsoft partnership - The AX strategy focuses on B2B customers, with plans to launch a Korea specialized secure public cloud and an AI model based on GPT-4 in 2024 [36][40] Question: Future CapEx levels and investments in 5G/6G - CapEx is expected to maintain 2024 levels, with no significant investments in 6G anticipated until 2028 or 2029 [48][49] Question: Shareholder return plans and share buyback - The company plans to maintain a minimum level of shareholder return and confirmed the KRW 250 billion share buyback, with the possibility of similar amounts in subsequent years depending on profit growth [53][54] Question: Cost savings from workforce reduction - The company reported a reduction of 4,400 employees, with 2,700 leaving and 1,700 transferring to a subsidiary, impacting labor costs positively [59][60] Question: Logic behind using subsidiary dividends for shareholder return - Dividends from subsidiaries qualify as resources for shareholder payouts, smoothing out profit fluctuations [62]
KT(KT) - 2024 Q4 - Earnings Call Transcript