KTF Q4 Net Nearly Doubles on Reduced Costs
KTF, Korea’s second-biggest mobile carrier, said Wednesday its fourth-quarter earnings almost doubled from a year earlier thanks largely to reduced marketing costs.
Net income stood at 101.9 billion won (US$73.7 million) in the October-December period, compared with 53.1 billion won a year earlier, the company said in a regulatory filing. The bottom line was also up 38.5 percent from three months earlier. Sales rose 0.4 percent on-year to 1.95 trillion won and operating profit soared 60.9 percent to 207.7 billion won, it said.
For all of 2008, however, net profit tumbled 32.6 percent on-year to 164.6 billion won due to increased marketing expenses and investment. Sales climbed 14.4 percent to 8.35 trillion won with operating income rising 3.1 percent to 454.4 billion won. Shares of KTF rose 0.6 percent to 30,150 won as of 2:13 p.m. on the Seoul bourse.
KTF attributed the improved fourth-quarter net to lower marketing costs. The company said its marketing costs fell 8 percent on-year to 394.7 billion won last quarter.
As of end-December, KTF had 14.4 million customers, up 4.7 percent from a year earlier. The company painted a gloomy outlook for this year, saying sales will remain sluggish due to weak demand and severe competition.
As the nation’s telecom market becomes increasingly saturated, companies are trying to promote combined fixed and mobile services to cut costs and woo customers from rivals.
Last week, KTF announced a plan to merge with its parent company KT, which is South Korea’s top fixed-line and Internet service provider. The plan is subject to approval by the telecom regulator and shareholders. South Korea boasts of a high mobile phone penetration rate with more than nine out of 10 people owning a cellular phone.
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