KT Q2 net profit sharply down due to data breach fines
Seoul, Aug 12
South Korea's major mobile carrier KT Corp said on Wednesday its second-quarter net income fell 34.5 per cent from a year earlier due to the effect of government fines from its massive data breach.
The company's net income for the April-June period on a consolidated basis was 480.6 billion won (US$339.9 million), according to its regulatory filing.
It posted an operating profit of 648.3 billion won for the quarter, a sharp 36.1 percent fall from last year, reports Yonhap news agency.
Sales fell 10.1 per cent to 6.68 trillion won. KT attributed the sharp decline in net income to 54 billion won in fines from the government over a major data breach that affected more than 16,000 users.
Its operating profit also fell in the second quarter from a year earlier due to costs related to its consumer compensation program, but improved from the previous quarter amid a recovery of its business-to-business unit, the company said.
Notably, its artificial intelligence (AI) and cloud business grew by 22.3 percent from a year earlier, as more companies, especially from the financial sector, adopted its AI-related infrastructure.
"We plan to continue growth focusing on our core portfolio, while also strengthening our customer data protection and security capabilities to build customer trust and enhance corporate value," the company said in a release.
To that end, KT plans to increase sales from its AI infrastructure and solution businesses to double the amount seen in 2025 by 2028. It will also secure an additional 1 gigawatt capacity in AI data centres and 90 terabits per second capacity in submarine cables by 2031, it said.
KT also said it is in the final stages of completing a 250 billion-won stock buyback plan announced in February, with the planned deadline set for Sept. 9.
Earlier, South Korea's privacy watchdog said it has fined wireless carrier KT Corp. 53.9 billion won ($37.4 million) over a major data breach that affected more than 16,000 users.
— IANS
Reader Comments
While the fines are substantial, it's encouraging to see KT's AI and cloud business growing by 22.3%. That's the future right there. Our own companies in India are making similar strides in AI adoption, especially in BFSI. Data security and innovation must go hand in hand.
Interesting to see how KT is balancing fines with future investments. Their plan to double AI revenue by 2028 and build 1GW data centres shows long-term vision. Many companies in the West are doing the same, but Asia is really pushing ahead.
16,000 users affected might not sound huge, but it's still a violation. In India, we've seen massive breaches with lakhs of records leaked. Accountability is key. The fine of ₹300 crore (approx.) is significant, and it's good to see they're also doing a stock buyback to reassure investors.
The 34.5% profit drop is a big hit, but it's good that they're owning up and compensating customers. Their focus on strengthening data protection and AI infra is smart. We're seeing similar trends with Indian telecoms investing in cloud and AI post-5G rollout. 👏
I appreciate that KT is being transparent about the fines and their recovery plans. The focus on B2B and AI-driven growth is a good pivot. However, I do think governments need to be strict but also provide a framework for companies to innovate without fear. Balance is key.
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