[6-K] KT Corp. Current Report (Foreign Issuer)
KT reported a strong operating quarter with consolidated revenue of KRW 7,427.4bn (+13.5% YoY) driven by growth in telecom, real estate projects and cloud/data-center businesses. Operating profit rose to KRW 1,014.8bn (+105.4% YoY), lifting the operating margin to 13.7% and reflecting both improved group-wide profitability and gains from real estate sales. EBITDA reached KRW 1,990.7bn (+36.3%), and net income increased to KRW 733.3bn (+78.6%).
Revenue from sale of goods jumped to KRW 1,609.6bn (+109.1% YoY), while cost of goods sold increased to KRW 1,282.6bn (+46.8% YoY), creating more revenue volatility. Operating expenses rose 5.9% YoY although labor cost fell 7.7% YoY. On the balance sheet, assets were KRW 42,193.3bn with cash of KRW 3,794.4bn; net debt was KRW 6,955.8bn and net debt/equity was 36.8% (up 3.3 percentage points YoY). Management announced shareholder returns including KRW 600 per share and a KRW 250bn dividend, and emphasized a strategic shift toward AI/IT with partnerships and new LLM-based products.
- Consolidated revenue of KRW 7,427.4bn, up 13.5% YoY
- Operating profit of KRW 1,014.8bn, up 105.4% YoY
- Net income of KRW 733.3bn, up 78.6% YoY
- EBITDA improved to KRW 1,990.7bn (+36.3% YoY) with a 26.8% margin
- Shareholder return actions announced: KRW 600 per share and a KRW 250bn dividend
- Strategic progress toward AI/IT transformation with LLM initiatives and Microsoft partnership
- Sale of goods surged to KRW 1,609.6bn (+109.1% YoY), increasing revenue volatility
- Cost of goods sold rose to KRW 1,282.6bn (+46.8% YoY), pressuring gross margins on goods
- Non-operating income turned to a loss of KRW 39.9bn on a consolidated basis
- Net Debt / Equity increased to 36.8% (up 3.3 percentage points YoY), reflecting higher subsidiary borrowings
Insights
TL;DR Strong margin recovery and cash profitability driven by real estate gains and device sales; core service growth was steady but volatility rose.
Consolidated revenue growth of 13.5% and a >100% increase in operating profit are material outcomes, supported by a large increase in sale-of-goods revenue and one-time real-estate gains. EBITDA expansion to KRW 1,990.7bn and an improved operating margin indicate meaningful operating leverage. Service revenue grew modestly, suggesting core telecom demand remained stable while ancillary businesses (devices, estate, cloud) drove headline performance. Investors should note the mix effect: higher COGS and sale-of-goods swings amplify topline but may compress margins absent recurring gross-margin improvement.
TL;DR Balance-sheet leverage rose and non-operating results flipped negative; sharp COGS and sale-of-goods swings raise earnings predictability concerns.
Net debt/equity increased to 36.8% (up 3.3p YoY) and borrowings rose at subsidiaries, reflecting higher financing needs. Non-operating income moved to a loss of KRW 39.9bn on a consolidated basis, reversing prior gains. The >100% increase in sale-of-goods revenue and a 46.8% jump in COGS highlight revenue concentration risk tied to device or goods sales timing. While headline profitability improved, these items could create quarter-to-quarter volatility and warrant monitoring.