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KT post a net loss in 2Q14 on the back of increased operating costs

30 Jul 2014

South Korea’s KT Corp registered a net loss in the quarter ended 30 June 2014 as operating expenses increased on significantly higher labour costs resulting from early retirement programme expenses.

In the three month period KT generated operating revenue of KRW5.895 trillion (USD5.31 billion), up 2.4% year-on-year from KRW5.757 trillion, of which service revenue accounted for the lion’s share – KRW4.988 trillion, up from KRW4.938 trillion. Turnover from wireless services totalled KRW1.798 trillion, representing a 2.7% increase against 2Q13, while by contrast wireline service revenues declined by 6.6% y-o-y to KRW1.408 trillion. With operating expenses standing at KRW6.708 trillion, this was up 24.0% against the KRW5.408 trillion recorded in the year earlier period. KT revealed that labour costs in the quarter more than doubled to KRW1.749 trillion from KRW813.3 billion, while merchandise costs increased by almost 20% as a result of higher handset sales. Earnings before interest, tax, depreciation and amortisation (EBITDA) in the quarter ended 30 June 2014 totalled KRW125.1 billion, down significantly from the KRW1.228 trillion reported a year earlier. Meanwhile, having reported a net income of KRW133.4 billion in 2Q13, in the second quarter of this year the operator posted a net loss of KRW757.2 billion.

In operational terms, at the end of June 2014 KT had a total wireless subscriber base of 16.774 million, up from 16.439 million a year earlier. Of that total 9.408 million were signed up to the operator’s LTE services, representing an increase of more than 55% against the 6.057 million 4G accesses on its books at the end of the second quarter of 2014. Fixed line voice connections declined in the period under review, however, with PSTN and voice-over-internet protocol (VoIP) customer numbers falling to 14.165 million and 3.450 million, respectively. Fixed broadband accesses remained static, meanwhile, totalling 8.039 million at end-June 2014, almost unchanged from the 8.038 million recorded a year earlier, and down from a peak of 8.067 million at the end of 2013.

South Korea, KT Corp

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