KT Corp., South Korea’s second-largest mobile carrier, said Friday it swung to a profit in the second quarter from a year earlier on reduced costs and a one-off gain from asset sales.
It booked 321.8 billion won ($274.9 million) in net income for the April-June period, a turnaround from a net loss of 757.2 billion won the previous year, the company said in a regulatory filing.
The figure, however, missed the median estimate of 421.7 billion won in a poll by Yonhap Infomax, the financial news arm of Yonhap News Agency.
Operating profit came to 368.8 billion won in the three-month period, also turning around from a loss of 813 billion won logged a year ago.
Sales slipped 3.6 percent on-year to 5.43 trillion won in the second quarter, weighed down by a sluggish fixed-line business whose revenue declined due to a continued fall in the number of subscribers.
The turnaround came amid the company’s aggressive business restructuring, including job cuts. KT, privatized in 1995, had been suffering a slump with losses piling up as the company became too bulky.
The latest in a series of shake-up moves were the sales of its car rental and financing service arms — KT Rental and KT Capital — which have earned KT a non-operating income of about 1 trillion won, according to analysts’ estimates.
KT said it saved 785.1 billion won in labor costs by eliminating 8,000 jobs since April last year through a voluntary retirement program.
Analysts had initially forecast that the job-cut program would cost the firm at least 1 trillion won in compensation.
“We were able to improve the financial health by shaking up our business portfolios,” Shin Kwang-suk, KT’s chief financial officer, said in a statement.
KT said its mobile division posted 1.83 trillion won in sales, up 1.7 percent from a year earlier, buoyed by growth in its long-term evolution network.
KT said the data-based rate plan, which charges users only by data downloads and offers calls and messages for free, helped push up the number of new subscribers. KT was the first to have introduced the new rate offer in May, with other rivals following suit.
The average revenue per user, a key metric of profitability for telecom firms, rose 1.4 percent to 34,879 won.
The sales from media content offered to its 6 million subscribers via Internet TV gained 7.3 percent to 409.2 billion won, it said.
Shares of KT traded 1.16 percent up at 30,550 won on the Seoul bourse as of 10:35 a.m. on Friday. The earnings were released before the market opened. (Yonhap)
