(ATTN: ADDS CFO's comments from conference call in 10-12; ADDS share price in last para)
By Kim Eun-jung
SEOUL, Feb. 12 (Yonhap) -- KT Corp., South Korea's major telecommunication company, said Tuesday it swung to a net profit in the fourth quarter, but its sales and operating profit fell due to its sluggish mobile business.
KT logged 18.1 billion won (US$16 million) in net profit in the October-December period, compared with a net deficit of 123.5 billion won from a year ago, the firm said in a consolidated financial statement.
Its operating profit tumbled 28.4 percent on-year to 95.8 billion won in the three-month period due to its tepid wireless business as the nation's No. 2 mobile carrier expanded the smartphone tariff discount rate in line with the government policy. It also offered discounts to mobile consumers after a fire at its facilities in western Seoul led to massive Internet and phone disruptions in November for days.
Sales slipped 1.8 percent to 6 trillion won in the last three months of 2018, the company said.
The fourth-quarter operating profit far missed the median market estimate by Yonhap Infomax, the financial arm of Yonhap News Agency, of 172.3 billion won.
For 2018, sales of the nation's largest broadband and fixed-line provider increased 1.6 percent on-year to 23.8 trillion won as strong revenue from its broadband and Internet Protocol television (IPTV) service offset its weak wireless business.
Its operating profit stood at 1.2 trillion won in 2018, down 11.4 percent from a year earlier due to downbeat mobile sales and a hike in labor costs.
Sales from the fixed-line phone have been on a steady decline as more people are using mobile phones instead of landlines, while high-speed broadband Internet service posted a strong performance on rising demand for high-quality content.
Revenue from its media and content business increased thanks to robust demand for IPTV, with its subscribers reaching 7.85 million as of December, the nation's largest.
KT projected its sales to reach 24 trillion won this year, slightly up from 2018, saying it will bolster efforts in platform businesses, such as IPTV and mobile application, to keep up with the rapidly changing market trend.
It also vowed to develop new growth drivers in emerging fields, including voice-command artificial intelligence service, Internet security, smart energy and connected cars.
"The wireless service is expected to make a turnaround in the latter half of this year," Yoon Kyung-keun, KT's chief financial officer, said during a conference call. "We will make efforts to maintain the upward momentum in the high-speed internet service and media content businesses and spur growth in the platform business."
The company said it will launch 5G service for end users next month and expand infrastructure nationwide this year, following its network launch for selected businesses in December.
"KT will strive to get ahead in the 5G market with the world-class 5G technology and service," Yoon said.
On Tuesday, shares of KT closed at 28,450 won, down 0.87 percent from the previous session. The fourth-quarter earnings result was released after the market opening.