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KT Reports Core Business Operating Profit Growth With Strong Revenue Expected in 2021

Dan Baker Senior Equity Analyst

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.

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Company Profile

Business Description

KT is South Korea's largest fixed-line telecom operator, with around 15 million customers. It is the largest broadband firm in the country, with 9.1 million customers, and the second- largest wireless operator with 22.3 million subscribers; the company also has 8.7 million pay-television customers. Additionally, it has about 30 nontelecom businesses. These nontelecom businesses, IPTV and wireless data are the focus of its growth strategy.

KT Gwanghwamun Building East, 33, Jong-ro 3-Gil, Jongno-gu
Seoul, 03155, Korea, Republic of
T +82 317270114
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 22,720