Analyst Note| Dan Baker |
KT’s fourth-quarter 2020 result was slightly above our expectations with service revenue up 0.2% and operating income up 12.6%, mainly due to increased operating income from the core business which increased operating income by 121% due to reduced handset subsidies. KT Real Estate business again saw a 40% decline in revenue due to COVID-19 impacting rental demand which drove the operating profit from major subsidiaries down 50%. After paying out KRW 1,100 in dividends in each of the previous two years KT announced a KRW 1,350 dividend implying a 50% payout ratio, on top of the KRW 300 billion share buyback announced in November 2020. KT is guiding for 4% services revenue growth from the core business in 2021 with overall revenue expected to grow at least 4.6% to over KRW 25 billion.