KT, 3rd quarter operating profit 6.1%↓… AX orders increased by more than 20% (comprehensive)

KT[030200] announced on the 10th that its operating profit in the third quarter of this year on a consolidated basis was 505.3 billion won, down 6.1% from the same period last year.

Sales amounted to KRW 6.9975 trillion, down 1.8% from the same period last year (KRW 7.1267 trillion).

Operating profit decreased due to the base effect from one-off real estate sales profits reflected in the same period last year, but the profit contribution of major group companies such as data centers, real estate, and content increased.

On a separate basis, sales were KRW 4.9878 trillion and operating profit was KRW 299.3 billion. Operating profit decreased compared to the same period last year due to the impact of the customer reward program that ended in July and increased costs related to the artificial intelligence conversion (AX) business.

Wireless service sales decreased by 3.9% compared to the same period last year due to the implementation of customer reward programs and the loss of subscribers during the fee exemption period.

However, the company explained that it has been showing signs of recovery since July, thanks to the launch of flagship smartphones and increased sales of premium plan plans.

Landline business sales decreased by 1.8% compared to the same period last year due to a decrease in demand for landline phones and a decline in advertising and pay-per-view (PPV) sales in the media business. High-speed Internet and IPTV subscribers increased by 1.4% and 0.5%, respectively.

Corporate service sales decreased by 0.7% due to the base effect from the end of a large-scale construction project last year.

On the other hand, the cumulative order amount in the business-to-business (B2B)/AX business in the third quarter increased by more than 20% compared to the same period last year.

KT expected related sales to begin in earnest from the fourth quarter based on large-scale business orders such as AI data center (AIDC) and AI computing center network construction.

Infrastructure investment to expand the AX business was also specified.

Under the goal of expanding the size of its AI data center to more than 1GW by 2031, KT plans to sequentially operate six new data centers in Gaebong, Gunsan, Yongin, and Ansan, starting with Bucheon in 2027.

Last month, we launched 'KT Token Factory', a platform that allows you to select various AI models and manage usage costs and safety in an integrated manner. We plan to expand the number of models provided to more than 500 in cooperation with OpenRouter, a global AI model platform.

Among major group companies, KT Estate's sales increased by 39.1% compared to the same period last year, thanks to real estate sales and growth in hotel and rental business. Sales of content subsidiaries also increased by 12.1%, thanks to increased sales of its own productions.

KT Cloud recorded sales of 268 billion won, a 7.7% increase compared to the same period last year, due to increased co-location sales due to the increase in gasan data center operation rate.

K Bank [279570]'s net profit in the third quarter increased by 128% compared to the same period last year, and the number of customers expanded to 16.88 million. The loan balance exceeded 20 trillion won.

KT completed the purchase of 250 billion won worth of shares last September and decided to pay a cash dividend of 600 won per share in the third quarter. Dividends will be paid on the 12th.

Min Hye-byeong, KT's chief financial officer (CFO), said, "We will do our best to improve corporate value by restoring the profitability of our main telecommunications business and initiating B2B and AX growth."