South Korea's No. 2 telecom giant KT Corp. said Friday its loss widened last year from a year earlier due mainly to its one-off cost in compensating voluntary retirees.
Net loss reached 966 billion won (US$883 million) last year, sharply increasing from the loss of 60.2 billion won a year earlier, the company said in a regulatory filing.
Sales also dipped 1.6 percent on-year to reach 23.4 trillion won last year. KT also suffered an operating loss of 291.8 billion won last year, shifting from 839.34 billion won in operating income posted a year earlier, the country's top fixed-line operator said.
The 2014 business results were weaker than the median estimates by 13 brokerage houses, which projected 767.9 billion won in net loss and 210 billion won in operating losses, according to the data compiled by Yonhap Infomax, the financial arm of Yonhap News Agency. They had expected 23.6 trillion won in revenue.
The fourth-quarter net loss came to 241.42 billion won, narrowing from the loss of 542.5 billion won a year earlier.
Revenue moved down 7.9 percent on-year to reach 5.7 trillion won in the fourth quarter, while it turned to an operating profit of 34.09 billion won.
KT said while its fixed-line business suffered, one-off spending on its voluntary retirement program was one of the major reasons for its bad performance. The company said it will be able to improve its performances once it can cut down on labor costs from the program.
By sectors, KT said the mobile business saw its revenue advance 4.8 percent on-year to 7.31 trillion won last year on the back of the increase in the number of subscribers. KT held 10.8 million users of long-term evolution (LTE) services as of end-2014, which accounted for 62.4 percent of its mobile service users.
In contrast, KT's fixed-line business continued to lose ground, with its revenue falling 7.2 percent on-year to 5.53 trillion won in 2014.
Its rental and financial businesses, led by its affiliates -- BC Card and KT Rental -- saw their revenue move up 8 percent on-year to 4.16 trillion won in 2014.
The combined operating profits of its affiliates -- BC Card, KT Skylife and KT Rental -- also reached 209 billion won last year, up 15.8 percent from the previous year, it added.
Analysts said the country's new retail law aimed at bringing transparency to the smartphone market had limited impact on cutting marketing costs for carriers, who instead turned to other promotional tools.
The South Korean government enacted the law in October to crack down on subsidies handed out by manufacturers and carriers in their competition to sign on new customers.
"In 2015, the handset retail law will settle down in the market, thus setting a new paradigm in competition," KT said.
Shares of KT closed 0.17 percent down Thursday at 29,950 won.
The earnings results were released before the stock market opened Friday. (Yonhap)