KT reported poor performance in the fourth quarter due to the impact of a one-time increase in labor costs stemming from a large-scale restructuring. This is the first time KT's quarterly performance has turned to a deficit since 2014.
KT disclosed on the 13th that it recorded an operating loss of 655.1 billion won based on its 2024 fourth quarter consolidated financial statement. Revenue was 6.5756 trillion won, a decrease of 1.7% compared to the previous year. KT explained that the transition to an operating loss in the fourth quarter was due to one-time labor costs of around 1 trillion won incurred from the recent large-scale restructuring.
Last year, KT established subsidiaries "KT Netcore" and "KT P&M" and relocated some personnel from headquarters. Through this, a total of 4,400 personnel were reduced, including about 2,800 who applied for special voluntary retirement. Kim Su-jin, a researcher at Mirae Asset Securities, noted, "As the number of employees decreases from over 19,000 to around 14,000, labor costs will reduce by about 300 billion won annually," adding, "As a result, next year, KT's annual operating profit is expected to reach around 2 trillion won."
KT explained that the slight decrease in revenue in the fourth quarter was due to the shrinking of unprofitable businesses such as Taeyang, digital logistics, and metaverse, as well as the poor performance of its subsidiaries KT SkyLife and BC Card.
Looking at the annual performance, KT's operating profit significantly decreased. KT's annual operating profit for 2024 was 809.5 billion won, which is a 50.9% decrease compared to the previous year. Last year's revenue was 26.4312 trillion won, a 0.2% increase over the previous year, achieving the highest revenue since its inception, but the annual operating profit plummeted due to an increase of about 1 trillion won in voluntary retirement labor costs.
KT explained that the record revenue last year was due to the stable growth of its B2C (business-to-consumer) and B2B (business-to-business) operations, which led to its separate service revenue surpassing 16 trillion won.
In detail, revenue from the wireless business increased by 1.3% compared to the previous year by broadening customer choices through the launch of various plans such as the online no-contract plan "Yogo." Revenue from the high-speed internet business increased by 1.1% thanks to the rise in giga internet subscribers, and the media business saw a 1.2% increase in revenue compared to the previous year due to net subscriber growth in Internet Protocol Television (IPTV) and an increase in high Average Revenue Per User (ARPU) subscribers.
KT plans to solidify business results based on its strategic partnership with Microsoft (MS) this year. Utilizing a Korean artificial intelligence (AI) model to be launched in the first half of the year, it aims to intensively target domestic customers and accelerate revenue generation in the AI and cloud sectors by strengthening its professional consulting capabilities.
Jang Min, KT's Chief Financial Officer (CFO), said, "Last year, KT Group was able to achieve maximum revenue through the transition to AICT corporations and strengthening its core competitiveness," adding, "In 2025, we will achieve sustainable growth based on strengthening AX capabilities and innovation, and faithfully implement plans to enhance corporate value to elevate KT's corporate value to a new level."