As part of its post-communication strategy, KT’s choice of strengthening its B2B business such as artificial intelligence (AI) and digital transformation (DX) has returned with good results, surpassing 15 trillion won in sales in the service sector. KT announced on the 9th that it recorded 23 trillion 9167 billion won in sales, 1.184 trillion won in operating profit, and 703.4 billion won in net profit in 2020. Sales fell 1.7% year-on-year, but operating profit and net profit increased 2.1% and 5.6%. KT recorded 17,8792 billion won in sales, 87.8 billion won in operating profit, and 665.5 billion won in net profit. Compared to the previous year, sales declined 1.8%, and operating profit and net profit grew 17.4% and 55.3%, respectively.
KT’s 2020 business performance (Unit: KRW billion, Data = KT)
The growth of KT’s operating profit was driven by service businesses such as AI and DX. Amid the even growth of the business, excluding fixed-line phone sales, it generated a total of 15.82 trillion won in sales, accounting for most of the profits. In particular, the AI·DX business division’s sales increased 11.8% year-on-year, showing the highest growth rate within the group. Among them, the data center (IDC) and cloud businesses recorded double-digit growth from the previous year. Yongsan IDC, the largest capacity in Korea, opened in November 2020, also surpassed the reservation rate of 70% in three months. The cloud business is expanding its customer base centered on public and financial institutions. In the’Cloud One Team’ led by KT, about 20 major industry, academia, and research affiliates have participated and are concentrating on expanding the cloud base.
In addition, AI contact center (AICC, artificial intelligence call center) services using AI voice recognition technology are expanding to various industries such as large corporations, financial companies, and educational institutions. Blockchain sales using the Good Han Pay platform also increased about 7 times in 2019 as the amount of local currency issuance increased by local governments to strengthen local commercial districts after Corona 19.
The IPTV business also contributed to an increase in operating profit due to increased platform sales. Related sales increased 7.7% year-on-year to KRW 1,723.2 billion. A KT official explained, “We have solidified our No. 1 position in the paid broadcasting market by continuing a net increase in subscribers by strengthening service competitiveness through expansion of alliances.” In addition, he added, “The sales in the B2B market such as 5G-based smart cities, smart factories, digital logistics, and AI robots are more than double that of our competitors.
Wireless sales, the flagship business, declined due to Corona 19, but recorded a net increase in 5G subscribers, reaching KRW 6.933.8 billion, a 1.3% increase from the previous year.
According to KT, as of the end of 2020, KT’s cumulative 5G subscribers were 3.62 million. This is an increase of 163% from 1.42 million people recorded in 2019, the highest net subscriber increase among the three domestic mobile telecommunications companies including SK Telecom and LG U+. KT analyzed that the strategy to strengthen a customized special rate plan that considers the age, content, and usage of each customer contributed positively to the net increase in 5G subscribers. Currently, KT is ranked No. 1 with a slight difference compared to SKT (23%) and LG Uplus (24%) at 25% of the domestic postpaid plan subscribers.
Unlike wireless, fixed-line phone sales fell 7.3% year-on-year to KRW 1,465.5 billion, and high-speed Internet sales recorded KRW 2 trillion, the level of the previous year. According to KT, high-speed Internet service has attracted 9 million subscribers in Korea after 22 years of commercialization, and GiGA Wi, launched in the first half of the year, provides a Giga Wi-Fi environment in the home and has a good response, attracting about 25% of new subscribers. Are getting.
The sales of BC Card, a financial subsidiary, fell 4.2% year-on-year to KRW 3.386.4 billion due to the decrease in foreign travelers and consumption contraction caused by Corona 19. KT Estate, a real estate subsidiary, also saw a 24.9% decline in sales from the previous year due to pre-sale sales and a drop in hotel sales due to a decrease in travelers.
Sales of major KT group companies
The media sector has shown solid growth despite the aftermath of Corona 19. KT’s media sales totaled KRW 3,193.9 billion, including IPTV, Skylife, and content subsidiaries. This is an increase of 6.5% compared to 2020 and is the first 3 trillion won in sales. KT predicts that media sales will continue to rise this year through the acquisition of Hyundai HCN and the establishment of a content specialized corporation.
On the other hand, as net profit improved significantly in 2020, KT strengthened shareholder return. In accordance with the strengthened dividend policy in May 2020, KT decided the dividend per share to be 1,350 won, an increase of 250 won from the previous year, and will be paid after being confirmed at the regular shareholders’ meeting in March.
KT Chief Financial Officer Kim Young-jin said, “By 2021, we will achieve a drastic business portfolio transformation centered on the digital platform business.”