SEOUL, Feb. 6 (Korea Bizwire) – KT Corp., South Korea’s major telecommunication firm, said Thursday its net profit fell 12.2 percent last year from a year earlier as it ramped up spending on its network and marketing.
In a regulatory filing, KT reported a net income of 669.3 billion won (US$ 565.7 million) last year, down from 762.3 billion won in 2018, on a consolidated basis.
The company said that operating profit for the year fell 8.8 percent on-year to 1.15 trillion won, although its annual revenue increased 3.8 percent on-year to 24.34 trillion won.
KT attributed its weak 2019 earnings to increased network investment and marketing costs for its commercial 5G service.
Last year, KT’s capital expenditures reached 3.2 trillion won, up 65 percent from a year ago, as it beefed up efforts to set up 5G base stations nationwide.
As of February, KT said it has opened more than 71,000 5G base stations, covering some 85 municipalities in South Korea.
KT also spent 2.7 trillion won on marketing activities in 2019, up 18.4 percent from a year ago, to attract 5G customers. The company began its commercial 5G service in April.
In the fourth quarter, KT posted a net loss of 6.8 billion won, turning from a profit of 18.1 billion won a year earlier.
The company’s operating profit, however, rose 54.7 percent on-year to 148.2 billion won in the October-December period, while sales increased 3.4 percent to 6.19 trillion won.
For the whole of 2019, KT’s wireless business posted a revenue of 6.9 trillion won, up 0.2 percent from a year earlier.
The company said the number of its mobile service subscribers reached 21.9 million in 2019, up 800,000 from a year ago, with 1.42 million customers using its 5G service.
KT’s wired business’ sales declined 1 percent on-year to 4.6 trillion won last year, with its wired telephone sector falling 7.6 percent on-year to 1.5 trillion won.
However, sales from its high-speed internet division increased 0.9 percent on-year to 2 trillion won.
KT said its media and content division’s revenue jumped 13.5 percent on-year to 2.7 trillion won last year. The company said the number of its pay TV service subscribers increased to 8.3 million in 2019.
To improve its earnings this year, the company said it will focus on introducing better 5G and artificial intelligence-related services.
KT said in a conference call that it expects sales of 25 trillion won in 2020, with capital expenditure of around 3.1 trillion won.
Shares in KT rose 2 percent to 25,450 won on the Seoul bourse. The earnings report was released before the market closed.