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KT’s 4Q net profit dampened by increased marketing, goods costs

28 Jan 2011

South Korea’s KT Corp posted a fourth-quarter net profit which, despite being a significant improvement when compared with a net loss in the same period a year earlier, was below a number of estimates. Having reported a net income of KRW105.1 billion (USD95 million) for the three months ended 31 December 2010 against a loss of KRW430.5 billion in 4Q09, rising marketing and smartphone costs are understood to have impacted on the company’s bottom line. In the three-month period KT reported that marketing costs had risen 2.3% year-on-year to KRW684.1 billion, while the costs of goods sold increased by almost 50% to KRW1.23 trillion. Revenues meanwhile for the quarter stood at KRW5.19 trillion, up 9.3% y-o-y.

In terms of subscribers, at end-December 2010 KT reported a wireless subscriber base of 16.04 million, up 6.8% from 15.02 million a year earlier, while fixed line voice customers continued to decline, standing at 19.36 million; the drop has, in part, been offset by the growth in VoIP services, with KT counting some 2.72 million internet telephony customers at that date, a 60.1% annual increase. Broadband subscribers meanwhile totalled 7.42 million at 31 December 2010, up from 6.95 million a year earlier.

South Korea, KT Corp

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