KT confirms Kbank's IPO in 2023

Workers install 5G antennas on a rooftop in Hong Kong in this file photo. EPA-Yonhap

By Kim Yoo-chul

KT, the country's dominant fixed line operator, said Tuesday that it is planning for affiliate Kbank's initial public offering (IPO) in 2023, and added that the IPO plans of its other affiliates have also been scheduled.

"KT will be very active in pursuing the IPOs of the group's affiliates. Kbank is scheduled to go public in 2023. Plus, KT's content affiliate, Studio Genie, is also on target for a successful IPO," KT's finance chief Kim Young-jin told investors during a conference call upon announcing its second quarter earnings, Tuesday.

Regarding the growth outlook for the latter half of the year, the KT executive said that the planned rollout of Samsung's new foldable phones and Apple's iPhone 13 will help it boost the number of customers using its premium fifth-generation (5G) service packages. "By the end of this year, the total number of 5G subscribers will reach 40 percent of all users," Kim told investors.

KT is on a growth trajectory, despite the continuation of the COVID-19 pandemic, because more subscribers have been moving to KT's fifth-generation (5G) telecom service plans, helping it gain more average revenue per user (ARPU).

In a regulatory filing Tuesday, KT said that its ARPU for the three months ending in June of this year remained at 32,342 won, an increase of 3 percent, year-on-year. The improvement was thanks to the increased number of subscribers using the company's 5G service plans.

As of the second quarter of this year, 5.01 million KT subscribers (35 percent of its total user base) are now using its 5G service plans, it said. ARPU is considered the benchmark metric to gauge the profitability of telecommunications firms.

KT's second quarter net income rose 77 percent, year-on-year, to 370.8 billion won on a consolidated basis, from 209 billion won. Operating profit during the latest quarter reached 475.8 billion won, up 38.5 percent during the same period, while revenue increased 2.6 percent to 6.03 trillion won. In terms of its second quarter operating profit, KT beat out the earlier market consensus that it would report 416.2 billion won.

Worsening sales at its corporate IT and solutions unit hit its business-to-business (B2B) division, which the company has identified as its next growth engine, as the quarterly revenue of its B2B division remained at 691 billion won. While its real estate business contracted because of the slowdown in the overall economy amid the continued COVID-19 pandemic, an increase in its BC Card unit and the growth of its content-centric businesses didn't have too much of a destructive effect on the company's bottom line.

Finance Chief Kim said that it plans to roll out various types of "service robots" for corporate clients, as a way to focus more on bolstering its corporate client-oriented portfolios. Citing its earlier investment in banking platforms such as Banksalad, the KT executive told investors that it will keep an eye on fintech-driven businesses.

Unsurprisingly, its internet-protocol television (IPTV) unit was the top beneficiary amid the ongoing pandemic because the tougher social distancing measures significantly helped it accelerate the growth of its IPTV service and content creation. For the most recent quarter, KT's IPTV unit reported 466 billion won in operating profit, an increase of 14.5 percent, year-on-year. "Working from home and home-learning trends sparked additional demand for KT's IPTV content," it said.

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