South Korea’s KT today reported a net loss for 2014 more than 15 times higher than in 2013 due mainly to the one-off cost of a voluntary retirement programme.
Its net loss last year expanded to KRW965.5 billion ($888 million) from a loss of KRW60.2 billion in 2013, while revenue also was down 1.6 per cent to KRW23.42 trillion.
Service revenue fell just 0.6 per cent to KRW19.96 trillion, but merchandise revenue dropped almost 13 per cent to KRW4.46 trillion due to the impact of the country’s new regulation limiting handset subsidies to KRW350,000.
Operating expenses were up 3.2 per cent to KRW23.7 trillion. Despite a drop in handset sales volumes, marketing costs increased 17.6 per cent to KRW3.15 trillion and labour costs jumped 21.6 per cent to KRW4 trillion due to the early retirement scheme.
On the positive side, its wireless revenue expanded 4.8 per cent to KRW7.3 trillion and ARPU increased 9.7 per cent to KRW35,283 ($32.50).
The country’s second largest mobile operator with a 31 per cent market share added almost three million 4G subscribers last year, bringing its total to 10.8 million. 4G users accounted for 62 per cent of its 17.3 million subscribers, up from 52 per cent at the end of 2013. KT said it had 870,000 net mobile additions last year.
The media and content business saw revenue increase 11.3 per cent to KRW1.508 trillion. IPTV consumers rose by 89,000 to 5.8 million.
Its wireline business continued to post losses, with revenue falling 7.2 per cent to KRW5.53 trillion. Fixed-line telephony accounted for the majority of that decline, dropping 12.5 per cent to KRW2.6 trillion, while broadband revenue was down 0.4 per cent to KRW1.76 trillion despite a net gain of 62,000 new subscribers. The company has 8.13 million broadband customers and 17.26 million fixed-line connections (down 761,000 from 2013).
Total capex spending fell 24 per cent to KRW2.5 trillion, with investment in wireless dropping 30 per cent to KRW900 billion, while fixed-line spending was steady at about KRW1.28 trillion.
EBITDA fell 20 per cent, or 3.6 points, to 14.9 per cent.