KT Corporation Q3 FY2025 earnings call

• Extended sincere apologies to customers and investors for unauthorized micro payments and infringement incident, with plan to compensate affected customers, replace SIM cards, and enhance security measures.
• Officially began CEO nomination process, with Director Candidate Nomination Committee to select candidates by year-end.
• Sustained revenue and operating profit growth in Q3 due to telco business, core portfolio growth, and real estate profit from Gwangjin District development.
• Collaborated with global big tech, launched AI models (Mi:dm2.0, SOTA K, Llama K), opened KT Innovation Hub with Microsoft.
• Third quarter dividend at KRW 600 per share, 20% higher year-over-year. Completed KRW 250 billion share buyback on 13th of August.

Operating revenue was up 7.1% year-over-year, reporting KRW 7.1267 trillion. Operating profit was up 16% Y-o-Y, reporting KRW 538.2 billion. Net income was up 16.2% Y-o-Y, recording KRW 445.3 billion. EBITDA increased 5.2% Y-o-Y, reaching KRW 1.5039 trillion.

• Wireless revenue: Up 4% year-on-year to KRW 1.8096 trillion, with 5G penetration at 80.7% at Q3 end.
• Fixed-line business: Broadband internet revenue up 2.3% Y-o-Y to KRW 636.7 billion; media business up 3.1% Y-o-Y; home telephony revenue down 6.6% Y-o-Y to KRW 160.9 billion.
• B2B business: Service revenue up 0.7% Y-o-Y; AI and IT business revenue down 5.7% Y-o-Y.
• Major subsidiaries: Content subsidiaries revenue down 1.8% Y-o-Y; KT cloud revenue up 20.3% Y-o-Y; KT Estate revenue up 23.9% Y-o-Y to KRW 186.9 billion.

• Conservative outlook for Q4 due to seasonality, compensation measures, and uncertainties regarding fines/penalties. Full-year 2025 expected growth due to solid Q3 performance.
• Dividend payout depends on annual financial performance and shareholder expectations.
• Share buyback plan for 2026 to be flexible based on operational backdrop.

• Unauthorized micro payments and data breach incident leading to potential customer harm and financial impact.
• Seasonality effects in Q4.
• Uncertainties in determining final compensation amounts and potential fines/penalties.

Q: Concern about Q4 outlook, dividend for Q4, and share buyback in 2026.

A: Conservative Q4 outlook due to seasonality, compensation, and fines; dividend depends on annual performance; share buyback in 2026 will be flexible based on operational backdrop.

Q: Financial impact of hacking incident, timing of expenses.

A: SIM replacement costs recognized in Q4 figures; other expenses booked when incurred; over KRW 1 trillion investment in info security over 5 years.

Q: CEO appointment process and impact on value up plan.

A: CEO appointment via Director Candidate Nomination Committee; value up plan sustained regardless of CEO change