KT reveals 4Q net loss on back of job cuts

29 Jan 2010

South Korea’s KT Corp has released its financial results for the fourth quarter and full year 2009, revealing that in the last three months of the year it saw a net loss of KRW448.3 billion (USD385.5 million). The telco attributed the slump to increased labour costs in the wake of heavy job cuts that have formed part of the company’s reorganisational strategy following the merger of KT with its former wireless subsidiary KT Freetel (KTF). It is understood that the telco slashed 6,000 jobs in December 2009, approximately 16% of its total workforce, as part of an early retirement scheme designed to improve productivity. By comparison, in 4Q 2008, prior to the merger, the telco posted a net profit of KRW20 billion. Similarly, and also reflecting the costs of the job cuts in the period, operating income for the fourth quarter swung to a loss of KRW549.5 billion, compared to an operating profit of KRW259.7 billion a year earlier. Revenue however bucked the trend, with KT posting group total revenues of KRW4.75 trillion, up 4.8% year-on-year, with revenues from wireless services accounting for over half of the total, at KRW2.47 trillion.

Despite the worse-than-expected results in the last three months of the year, having recalculated its previous financial figures on a merged basis to provide for direct comparisons, for the twelve months ended 31 December 2009 KT posted a net profit of KRW605.1 billion, up 14.8% against FY2008, while full year revenue rose 35% to KRW15.91 trillion.

As at end-December 2009 KT reported that it had increased its wireless subscriber base to just over 15 million, up 4.5% year-on-year, but in line with the past two years the telco reported a decline in fixed line voice subscriber numbers, which fell 9.1% y-o-y to 18.05 million. However, this fall has been more than offset by a surge in VoIP customers; at end-2008 KT had just 328,000 internet telephony subscribers, but a year later this had risen to 1.7 million. Broadband customer numbers as at December 2009 were 6.95 million.

South Korea, KT Corp,

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