(LEAD) KT Q2 net profit sharply down due to data breach fines

KT Corp., South Korea's leading mobile carrier, reported a significant decline in its second-quarter net profit on August 12, citing the impact of government fines resulting from a massive data breach. The company's net income for the April-June period dropped by 34.5%, reaching 480.6 billion won (US$339.9 million), a stark contrast to the previous year's performance.

Operating profit for the quarter also saw a drastic 36.1% reduction, amounting to 648.3 billion won, down from 648.3 billion won in the same period last year. Sales experienced a 10.1% decline, totaling 6.68 trillion won. The primary driver behind these financial setbacks was the payment of 54 billion won in fines to the government in connection with the data breach, which impacted over 16,000 users.

In addition to the fines, operating costs related to a consumer compensation program contributed to the decline in operating profit. However, the company's business-to-business unit showed a positive trend, with revenues up 22.3% from the prior year, driven by increased adoption of its AI and cloud infrastructure by businesses, particularly in the financial sector.

KT acknowledged its commitment to growth, emphasizing its focus on core portfolio businesses while simultaneously enhancing data protection and security measures to rebuild customer trust and bolster corporate value. The company aims to double its sales in AI infrastructure and solutions by 2028 and plans to expand its AI data center capacity to 1 gigawatt and submarine cable capacity to 90 terabits per second by 2031.

Meanwhile, KT is nearing completion of a stock buyback program valued at 250 billion won, with the final tranche targeted for completion by September 9.