KT(KT) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Operating revenue increased by 6.9% year-on-year, reaching KRW 28,244.2 billion [25] - Operating profit surged by 205% year-on-year to KRW 2,469.1 billion, driven by core business performance and one-off gains from real estate projects [25] - Net income rose by 340.4% year-on-year to KRW 1,836.8 billion, while EBITDA increased by 35.5% year-on-year to KRW 6,349.3 billion [27] - Operating expenses remained flat year-on-year at KRW 25,775.1 billion, attributed to lower labor costs and efficient spending [29] - Debt-to-equity ratio at the end of 2025 was 120.7%, with net debt-to-equity ratio decreasing by 0.4 percentage points year-on-year to 37.4% [31] Business Line Data and Key Metrics Changes - Wireless revenue grew by 2.8% year-on-year to KRW 7,155.4 billion, driven by subscriber expansion in 5G, with 5G penetration at 81.8% by the end of 2025 [35] - Broadband revenue increased by 1.9% year-on-year to KRW 2,533.5 billion, supported by GiGA subscriber growth [37] - Media business revenue rose by 1.7% year-on-year, driven by higher IPTV subscriber additions [37] - B2B service revenue grew by 1.3% year-on-year, with AI and IT business growing by 3.1% year-on-year [41] - KT Cloud revenue surged by 27.4% year-on-year to KRW 997.5 billion, reflecting increased data center usage and AI cloud demand [43] Market Data and Key Metrics Changes - The company reported a flat revenue for content subsidiaries year-on-year, despite the divestment of PlayD, due to growth from StudioGenie, Nasmedia, and Millie's Library [41] - KT Estate revenue increased by 15.9% year-on-year to KRW 719.3 billion, driven by strong hotel business and new property developments [43] Company Strategy and Development Direction - The company is focusing on enhancing its fundamentals and regaining customer trust following a data breach incident, with a commitment to cybersecurity improvements [3][12] - Plans include a KRW 250 billion share buyback and cancellation as part of the Corporate Value Enhancement Plan [7][21] - The company aims to solidify its leadership in the AI cloud market with the launch of new products and partnerships with global tech companies [4] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving better performance in 2026 compared to 2025, despite the financial impact of customer compensation related to the data breach [57][61] - The new CEO is expected to maintain the company's shareholder return policy and growth strategy, with a focus on AX-driven innovation [69][70] Other Important Information - The year-end dividend for 2025 is set at KRW 2,400 per share, a 20% increase from 2024 [6] - The company is investing around KRW 1 trillion in security over five years to enhance its information security system [19] Q&A Session Summary Question: What is the financial impact of the customer compensation package regarding the data breach incident? - The estimated benefit for customers is about KRW 450 billion, but not all will be booked as costs, depending on usage [57] Question: Will the new CEO maintain the previous shareholder return stance? - The DPS has been increased by 20% for 2025, and future plans will be finalized by the new CEO and the Board of Directors [65][66] Question: What is the outlook for the wireless business growth following the data breach incident? - Approximately 230,000 subscribers left during the cancellation fee waiver period, but net additions were still positive [79] Question: Why is B2B growth slower compared to peers, and what is the outlook? - B2B growth is influenced by various segments, and when combined with KT Cloud, the growth rate is 6% year-on-year, with KT Cloud showing a 27.4% increase [85][87]