KT Alpha Reports 10.5% Increase in Q1 Operating Profit

KT Alpha has opted for profitability over expansion, achieving a double-digit growth rate in operating profit for the first quarter of this year.
 
The company has reduced its reliance on low-margin direct purchases, which carry significant inventory burdens, and has focused on developing its business-to-business (B2B) mobile gift certificate operations. This strategy has been deemed successful.
 
According to the Financial Supervisory Service's electronic disclosure system on May 8, KT Alpha reported a consolidated operating profit of 13.5 billion won for the first quarter, a 10.5% increase compared to the same period last year. Net profit for the period was 11.4 billion won, while total sales decreased by 0.4% to 96.2 billion won.
 
A representative from KT Alpha stated, "Sales slightly decreased due to adjustments in our product portfolio focused on consignment operations, but overall stability has improved."
 
In its core T-commerce sector, the effects of the profitability-focused restructuring are becoming evident. First-quarter sales fell by 4.0% year-on-year to 63.8 billion won due to reduced direct purchase operations, yet operating profit increased by 4.8%.
 
The introduction of exclusive products tailored to active seniors and lifestyle trends, along with enhanced programming, has contributed to this improvement in profitability.

The T-commerce market, which sells products via television, has faced challenges recently as viewership declines and mobile shopping surges. In response, KT Alpha plans to strengthen its mobile channels and enhance broadcast quality through artificial intelligence (AI) technology to boost competitiveness.
 
The mobile gift certificate business has shown even more pronounced growth. First-quarter sales of mobile gift certificates rose by 7.5% year-on-year to 32.4 billion won, with operating profit increasing by 8.4%. Notably, a targeted sales approach aimed at B2B clients and proactive partnerships with major platforms led to a 43.3% surge in overall transaction volume.
 
KT Alpha's mobile gift certificate brand, 'Giftishow,' maintains the top market share in the domestic B2B mobile gift certificate sector, surpassing 180,000 corporate clients by the end of last year.
 
KT Alpha is also enhancing its shareholder return policy. The company achieved a record annual operating profit of 44.2 billion won last year and initiated its first cash dividend of 280 won per common share, marking the beginning of its shareholder return strategy.
 
A KT Alpha representative remarked, "This year, we will focus on AI-driven efficiency and customer experience innovation under the theme of 'innovation amid stability.' Additionally, we plan to achieve sustainable growth and enhance shareholder value through expanded partnerships and group synergies."