KT (030200.KS) reported second-quarter operating profit of 648.3 billion won ($466 million), down 36.1% from a year earlier, dragged down by a base effect from a one-off presale gain booked last year on the Gangbuk headquarters land development project (NCP). Operating profit still rose 34.3% from the first quarter, supported by growth businesses such as artificial intelligence transformation (AX) and data centers. KT plans to more than double its AX revenue by 2028 from 2025 levels, positioning AX infrastructure and solutions as its core growth pillar.
On a consolidated basis, KT posted second-quarter revenue of 6.68 trillion won, operating profit of 648.3 billion won and net profit of 480.6 billion won, the company said on the 12th. Revenue fell 10.1% and operating profit fell 36.1% from a year earlier. Net profit also dropped 34.5%, reflecting a fine imposed over a personal data breach.
Compared with the previous quarter, revenue slipped 1.5% while operating profit rebounded 34.3%. Year-ago results included the one-off presale gain, whereas this year the recovery in profitability was led by the expansion of growth businesses such as data centers and real estate, along with improved earnings at content subsidiaries.
The AX business in particular sustained its growth, centered on the financial sector. Second-quarter AX revenue rose 22.3% from a year earlier, driven by rising demand for AI adoption among financial firms and double-digit growth at KT Cloud. KT handles the construction and operation of AI contact centers (AICC), including AI chatbots and consultation bots, for four of Korea's five largest commercial banks. In the first half alone, it won 22 financial-sector AX projects, including the deployment of an AI-based development and operations system (AIDLC).
Group growth businesses, including data centers, also contributed to the quarter-on-quarter earnings recovery. Revenue at KT Cloud rose 19.8% from a year earlier on the launch of a new data center in Gasan and the expansion of its design-build-operate (DBO) business. KT Estate extended its improvement on the recognition of results from the Daejeon Dunsan development project and gains from property sales, while content subsidiaries such as Millie's Library and Studio Genie also improved on a recovery in advertising and growth in the content business.
In the telecommunications business, subscriber recovery continued, but wireless service revenue fell 1.8% from a year earlier, affected by customer reward programs. The internet business grew 1.1% on an increase in gigabit internet subscribers and greater use of value-added services, while the media business declined 0.5% on lower advertising and pay-per-view (PPV) revenue.
KT plans to secure medium- to long-term growth drivers centered on AX. It aims to achieve a consolidated return on equity (ROE) of 9% to 10% by 2028 and to more than double its AX revenue from 2025 levels. To that end, it plans to add 1 GW of AIDC capacity and 90 Tbps of submarine cable capacity by 2031. To strengthen profitability, it also plans to expand the range of low-margin businesses targeted for restructuring and to accelerate the liquidation of non-core assets such as idle real estate and investment holdings.
KT Chief Financial Officer Min Hye-byung said the company delivered improved profit compared with the previous quarter "through the transition into an AX Platform Company and efforts to improve profitability," adding, "In the second half, we will continue growth centered on our core portfolio, while strengthening the protection of customer information and our security capabilities, and carrying out our corporate value enhancement plan without disruption."
