Korean telecom giant KT said Friday its operating profit increased by 18.6 percent though its sales dropped during the same period in the second quarter this year.

Operating income of KT in the second quarter reached 207.6 billion won ($175 million), compared to 203 billion won last year, according to a regulatory filing Friday.

Sales of KT during the same period dropped 3.6 percent to 5.8 trillion won, the regulatory filing also showed.

Improved earnings from business-to-business units helped the company’s latest performance, KT said. Sales of KT’s business-to-business units posted 701.1 billion won in sales in the second quarter, an increase of 2.4 percent on-year.

The mobile carrier added that cost-cutting efforts helped the company post improved operating profit. According to KT, operating expenses fell by 4.7 percent to 5.5 trillion won.

The revenue for KT’s artificial intelligence and digital business, including data centers and cloud services, reached 138.4 billion won, up 16 percent on-year.

The telecom firm’s pay TV business also grew, securing 137,000 new paying subscribers in the second quarter. The total number of IPTV service users reached 8.56 million, while sales increased by 0.5 percent.

Revenue of KT’s mobile business advanced by 0.6 percent on-year to 1.7 trillion won, backed by an increased number of 5G network users. As of the second quarter, KT had 2.24 million 5G network users. The company expected the number of its 5G network users to reach 3.5 million by the end of this year.

In a conference call, KT said its over-the-top online video platform Seezn and Netflix were complementary to each other.

KT recently signed on with Netflix to provide the service via its Olleh TV, in a deal that started Monday. KT said Seezn will continue to provide real-time broadcasts and video on demand not available via Netflix.

By Shim Woo-hyun(ws@heraldcorp.com)