-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DqHmts+NgQrlYcWhXZDj01caQn0XspdmaNW0R7EgYuOiwPiBbHWI38FFdjvHhgW3 fxIGuHwunHAo1oTwueDyVg== 0001193125-08-157601.txt : 20080725 0001193125-08-157601.hdr.sgml : 20080725 20080725063154 ACCESSION NUMBER: 0001193125-08-157601 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080725 FILED AS OF DATE: 20080725 DATE AS OF CHANGE: 20080725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KT CORP CENTRAL INDEX KEY: 0000892450 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14926 FILM NUMBER: 08969492 BUSINESS ADDRESS: STREET 1: 206 JUNG TA DONG BUNN DONG GU CITY: SUNGNAM CITY KOREA STATE: M5 ZIP: 463711 BUSINESS PHONE: 82317270932 MAIL ADDRESS: STREET 1: 206 JUNG JA DONG BUNN DONG GU CITY: SUNGNAM CITY KOREA STATE: M5 ZIP: 463711 FORMER COMPANY: FORMER CONFORMED NAME: KOREA TELECOM CORP DATE OF NAME CHANGE: 19971006 FORMER COMPANY: FORMER CONFORMED NAME: KOREA TELECOM DATE OF NAME CHANGE: 19950130 6-K 1 d6k.htm FORM 6-K Form 6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2008

Commission File Number 1-14926

 

 

KT Corporation

(Translation of registrant’s name into English)

 

 

206 Jungja-dong

Bundang-gu, Sungnam

Kyunggi-do

463-711

Korea

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F      ü            Form 40-F              

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):             

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes                       No      ü    

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                 

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: July 25, 2008
KT Corporation
By:  

/s/ Thomas Bum Joon Kim

Name:   Thomas Bum Joon Kim
Title:   Managing Director
By:  

/s/ Youngwoo Kim

Name:   Youngwoo Kim
Title:   Director


July 25, 2008

LOGO

2nd Quarter 2008

Preliminary Earnings Commentary

(KRX : 030200 / NYSE : KTC)


LOGO

 

 

 

Disclaimer

This material contains estimated information of unaudited non-consolidated preliminary financial and operating data of KT Corporation (“KT” or “the company”) for the second quarter of 2008 and forward-looking statements with respect to the financial condition, results of operations and business of KT. Statements that are not historical facts, including statements about KT’s beliefs and expectations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other future results or performance expressed or implied by such forward-looking statements. Such forward-looking statements were based on current plans, estimates and perfections of KT and the political and economic environment in which KT will operate in the future and therefore you should not place undue reliance on them.

Therefore, KT does not make any representation or warranty, expressed or implied, as to the accuracy or completeness of the unaudited financial and operating data contained in this material and such information maybe materially different from the actual results or performance of KT. KT speaks only as of the date it is made, and KT undertakes no obligation to update publicly any of them in light of new information or future events.

The financial and operating data contained in this presentation have been rounded. Since affiliated companies have not finished accounting, estimated figures were used for the equity method gains/losses.

KT’s non-consolidated financial statements and report for 2008 second quarter will be filed with the Financial Supervisory Service(FSS) and the Korea Exchange(KRX) on August 14, 2008.

If you have any questions in connection with the preliminary earnings, please contact Investor Relations Department of KT.

Tel : 82-31-727-0950~59

Fax : 82-31-727-0949

E-mail: ir@kt.com

 

 


LOGO

 

 

 

1. Financial Highlights

A. Summary of Income Statement

 

     2008     2008     QoQ     2007     YoY     2008  

(KRW bn)

   2Q     1Q     Amount     D%     2Q     Amount     D%     Cumm.  

OPERATING REVENUES

   3,029.0     2,967.0     62.0     2.1 %   3,009.4     19.7     0.7 %   5,996.1  

¨ Internet access

   539.8     528.1     11.7     2.2 %   529.9     9.9     1.9 %   1,068.0  

¨ Internet application

   148.2     106.9     41.2     38.6 %   97.7     50.4     51.6 %   255.1  

¨ Data

   413.0     402.4     10.6     2.6 %   407.8     5.2     1.3 %   815.4  

¨ Telephone

   1,016.3     1,023.2     -6.9     -0.7 %   1,037.3     -21.0     -2.0 %   2,039.4  

¨ LM

   358.5     364.1     -5.7     -1.6 %   405.3     -46.9     -11.6 %   722.6  

¨ Wireless

   428.8     419.9     8.9     2.1 %   399.4     29.4     7.4 %   848.7  

¨ Real estate

   60.5     58.7     1.8     3.0 %   58.4     2.1     3.5 %   119.3  

¨ Others

   64.0     63.6     0.4     0.7 %   73.5     -9.5     -12.9 %   127.6  

¡ SI

   48.1     52.1     -4.0     -7.7 %   66.5     -18.4     -27.7 %   100.1  

OPERATING EXPENSES

   2,661.4     2,634.0     27.5     1.0 %   2,626.2     35.2     1.3 %   5,295.4  

¨ Labor

   627.4     683.3     -55.8     -8.2 %   627.0     0.4     0.1 %   1,310.7  

¨ Commissions

   173.0     170.9     2.2     1.3 %   179.8     -6.8     -3.8 %   343.9  

¨ Sales commission

   228.8     230.1     -1.3     -0.6 %   248.8     -20.0     -8.1 %   458.9  

¨ Sales promotion

   69.0     79.3     -10.3     -13.0 %   47.2     21.7     46.0 %   148.3  

¨ Advertising

   32.3     16.9     15.3     90.4 %   35.4     -3.2     -9.0 %   49.2  

¨ Provision for doubtful accounts

   49.4     6.9     42.5     620.4 %   -0.4     49.8     N/A     56.2  

¨ Depreciation

   493.8     482.3     11.5     2.4 %   490.2     3.6     0.7 %   976.1  

¨ Repairs & maintenance

   32.1     22.0     10.1     45.7 %   51.1     -19.1     -37.3 %   54.1  

¨ Cost of goods sold

   180.8     157.3     23.6     15.0 %   176.2     4.6     2.6 %   338.1  

¨ Cost of service provided

   481.0     476.8     4.2     0.9 %   482.5     -1.5     -0.3 %   957.8  

¨ R&D

   57.2     56.8     0.4     0.6 %   54.7     2.5     4.5 %   114.0  

¨ Activation/installation and A/S cost

   92.1     96.5     -4.4     -4.6 %   84.5     7.6     9.0 %   188.7  

¨ Others

   144.5     154.9     -10.3     -6.7 %   149.1     -4.5     -3.0 %   299.4  

OPERATING INCOME

   367.6     333.0     34.6     10.4 %   383.1     -15.5     -4.0 %   700.7  

Operating margin

   12.1 %   11.2 %   0.9 % P     12.7 %   -0.6 % P     11.7 %

EBITDA(1)

   861.5     815.4     46.1     5.7 %   873.3     -11.9     -1.4 %   1,676.8  

EBITDA margin

   28.4 %   27.5 %   1.0 % P   29.0 %   -0.6 % P   28.0 %    

Non-operating income

   133.8     134.3     -0.6     -0.4 %   103.6     30.2     29.2 %   268.1  

Non-operating expenses

   307.9     269.6     38.3     14.2 %   144.2     163.8     113.6 %   577.5  

INCOME BEFORE INCOME TAXES

   193.5     197.8     -4.3     -2.2 %   342.5     -149.1     -43.5 %   391.2  

Income tax expenses

   32.9     43.7     -10.8     -24.6 %   112.8     -79.9     -70.8 %   76.6  

Effective tax rate

   17.0 %   22.1 %   -5.1 % P     32.9 %   -15.9 % P     19.6 %

NET INCOME

   160.5     154.1     6.5     4.2 %   229.7     -69.2     -30.1 %   314.6  

EPS(2) (units: won)

   788     756     32     4.2 %   1,115     -327     -29.3 %   1,545  

 

(1) EBITDA = Operating income + depreciation
(2) EPS = Net income ÷ Weighted average of no. of shares outstanding

¡ Revenue

- YoY and QoQ increase was due to rise in internet access and internet application revenue.

¡ Operating Income

- Decrease in labor and other costs led to a QoQ increase in operating income.

- QoQ decrease mainly due to increase in provision for doubtful accounts

 

 

3

 


LOGO

 

 

 

B. Summary of Balance Sheet

 

      2008     2008     QoQ     2007     YoY  

(KRW bn)

   2Q     1Q     Amount     D%`     2Q     Amount     D%  

TOTAL ASSETS

   17,801.3     17,596.1     205     1.2 %   18,254.4     -453.1     -2.5 %

¨ Current assets

   3,084.1     3,058.7     25.4     0.8 %   3,822.7     -738.6     -19.3 %

¡ Quick assets

   2,964.0     2,953.5     10.4     0.4 %   3,741.7     -777.7     -20.8 %

- Cash & Cash equivalents

   829.5     884.5     -55.1     -6.2 %   1,753.3     -923.8     -52.7 %

¡ Inventories

   120.1     105.2     14.9     14.2 %   81.0     39.2     48.4 %

¨ Non-current assets

   14,717.2     14,537.4     179.8     1.2 %   14,431.7     285.5     2.0 %

¡ Investments and other non-current assets

   3,823.5     3,753.8     69.7     1.9 %   3,767.8     55.7     1.5 %

- KTF shares

   2,531.2     2,595.4     -64.2     -2.5 %   2,687.9     -156.7     -5.8 %

- Long-term loans

   23.0     39.8     -16.8     -42.2 %   124.1     -101.0     -81.4 %

- Others

   1,269.3     1,118.5     150.7     13.5 %   955.8     313.4     32.8 %

¡ Tangible assets

   10,501.9     10,371.0     131.0     1.3 %   10,229.8     272.2     2.7 %

¡ Intangible assets

   391.7     412.6     -20.9     -5.1 %   434.1     -42.4     -9.8 %

TOTAL LIABILITIES

   9,025.9     8,983.8     42.0     0.5 %   9,606.5     -580.6     -6.0 %

¨ Current liabilities

   2,399.7     2,455.7     -55.9     -2.3 %   3,590.0     -1,190.2     -33.2 %

¡ Interest-bearing debts

   13.5     235.1     -221.6     -94.3 %   842.4     -828.9     -98.4 %

¡ Accounts payable

   758.6     664.0     94.6     14.2 %   665.6     92.9     14.0 %

¡ Others

   1,627.7     1,556.5     71.1     4.6 %   2,081.9     -454.2     -21.8 %

¨ Non-current liabilities

   6,626.1     6,528.2     98.0     1.5 %   6,016.5     609.6     10.1 %

¡ Interest-bearing debts

   5,196.7     5,104.6     92.1     1.8 %   4,632.8     563.9     12.2 %

¡ Installation deposit

   813.3     833.1     -19.7     -2.4 %   877.6     -64.3     -7.3 %

¡ Others

   616.1     590.5     25.6     4.3 %   506.1     110.0     21.7 %

TOTAL STOCKHOLDERS’ EQUITY

   8,775.4     8,612.3     163.1     1.9 %   8,647.9     127.5     1.5 %

¨ Common stock

   1,561.0     1,561.0     0.0     0.0 %   1,561.0     0.0     0.0 %

¨ Capital surplus

   1,258.5     1,276.7     -18.2     -1.4 %   1,440.8     -182.2     -12.6 %

¨ Retained earnings

   9,752.7     9,592.2     160.5     1.7 %   9,537.8     214.9     2.3 %

¨ Capital adjustments

   -3,828.0     -3,815.8     -12.2     N/A     -3,901.2     73.2     N/A  

¡ Treasury stock

   -3,837.4     -3,824.9     -12.6     N/A     -3,910.6     73.1     N/A  

¡ Gain(loss) on valuation of investment securities

   11.2     10.6     0.6     5.9 %   12.8     -1.6     -12.5 %

¡ Others

   -1.7     -1.5     -0.3     N/A     -3.4     1.7     N/A  

¨ Others

   31.2     -1.9     33.0     N/A     9.5     21.6     227.6 %

Total interest-bearing debt

   5,210.2     5,339.7     -129.5     -2.4 %   5,475.2     -265.0     -4.8 %

Net debt

   4,380.7     4,455.2     -74.4     -1.7 %   3,721.9     658.8     17.7 %

Net debt / Total shareholders’ equity

   49.9 %   51.7 %   -1.8 % P     43.0 %   6.9 % P  

¡ Assets

- Decline in cash and cash equivalents due to redemption of loan.

¡ Liabilities

- YoY and QoQ decrease in current liabilities due to redemption of loan.

- YoY and QoQ of non-current liabilities due to loss on foreign currency bonds appraisal affected by the rise in exchange rates.

¡ Stockholders’ Equity

- YoY and QoQ change in treasury stock due to purchase of shares for retirement.

 

 

4


LOGO

 

 

 

2. Operating Results

A. Internet Revenue

 

      2008    2008    QoQ     2007    YoY     2008

(KRW bn)

   2Q    1Q    Amount    D%     2Q    Amount    D%     Cumm.

Internet access

   539.8    528.1    11.7    2.2 %   529.9    9.9    1.9 %   1,068.0

¨ Broadband

   539.3    527.5    11.8    2.2 %   529.6    9.7    1.8 %   1,066.8

¡ Megapass

   508.4    501.1    7.3    1.5 %   510.1    -1.7    -0.3 %   1,009.5

¡ Nespot

   8.0    8.5    -0.5    -6.1 %   13.2    -5.2    -39.7 %   16.4

¡ WiBro

   22.9    17.9    5.0    27.7 %   6.3    16.6    264.7 %   40.8

¨ Others

   0.5    0.7    -0.1    -21.2 %   0.3    0.2    65.6 %   1.2

Internet application

   148.2    106.9    41.2    38.6 %   97.7    50.4    51.6 %   255.1

¨ IDC

   70.6    48.9    21.7    44.5 %   50.9    19.7    38.6 %   119.4

¨ Bizmeka

   47.4    36.7    10.7    29.1 %   30.4    17.0    55.8 %   84.0

¨ MegaTV

   9.6    5.0    4.6    90.5 %   0.8    8.8    1130.0 %   14.7

¨ Others

   20.6    16.3    4.3    26.1 %   15.6    5.0    31.9 %   37.0

¡ Megapass

- QoQ rise in revenue due to increase in subscribers.

¡ Internet application

- YoY and QoQ increase from rise in sales of IDC, MegaTV and Bizmeka.

B. Data Revenue

 

      2008    2008    QoQ     2007    YoY     2008

(KRW bn)

   2Q    1Q    Amount    D%     2Q    Amount    D%     Cumm.

Data

   413.0    402.4    10.6    2.6 %   407.8    5.2    1.3 %   815.4

¨ Leased line

   269.9    268.3    1.7    0.6 %   277.2    -7.3    -2.6 %   538.2

¡ Local

   115.6    116.8    -1.2    -1.0 %   118.1    -2.5    -2.1 %   232.5

¡ Domestic long distance

   81.2    80.2    1.0    1.2 %   84.2    -3.0    -3.6 %   161.3

¡ International long distance

   6.3    5.0    1.2    24.4 %   4.6    1.7    36.6 %   11.3

¡ Broadcasting & others

   66.9    66.2    0.6    0.9 %   70.3    -3.4    -4.9 %   133.1

¨ Data leased line

   39.2    37.8    1.4    3.8 %   33.6    5.6    16.8 %   76.9

¡ Packet data

   1.5    1.6    -0.1    -4.1 %   2.1    -0.5    -25.8 %   3.2

¡ National network ATM

   21.3    20.7    0.6    2.7 %   18.5    2.8    15.0 %   42.0

¡ VPN

   16.4    15.4    0.9    6.0 %   13.0    3.4    26.2 %   31.8

¨ Kornet

   67.8    62.9    4.9    7.8 %   65.0    2.8    4.3 %   130.8

¨ Satellite

   27.7    26.0    1.8    6.9 %   25.4    2.3    9.2 %   53.7

¨ Others

   8.3    7.5    0.8    10.6 %   6.6    1.7    25.8 %   15.7

 

 

5


LOGO

 

 

 

C. Telephone Revenue

 

      2008    2008    QoQ     2007    YoY     2008

(KRW bn)

   2Q    1Q    Amount    D%     2Q    Amount    D%     Cumm.

Telephone revenue

   1,016.3    1,023.2    -6.9    -0.7 %   1,037.3    -21.0    -2.0 %   2,039.4

¨ Subscriber connection

   335.3    340.3    -5.0    -1.5 %   347.5    -12.2    -3.5 %   675.6

¡ Subscription fee

   7.9    9.2    -1.3    -14.1 %   11.7    -3.8    -32.2 %   17.1

¡ Basic monthly fee

   267.5    270.1    -2.5    -0.9 %   275.4    -7.9    -2.9 %   537.6

¡ Installation

   6.5    7.9    -1.3    -17.0 %   9.1    -2.6    -28.1 %   14.4

¡ Interconnection

   53.3    53.1    0.2    0.4 %   51.4    2.0    3.9 %   106.5

¨ Local

   217.9    224.2    -6.3    -2.8 %   233.7    -15.8    -6.8 %   442.0

¡ Usage

   139.2    147.6    -8.4    -5.7 %   158.3    -19.1    -12.1 %   286.7

¡ Interconnection

   25.4    23.8    1.6    6.6 %   23.3    2.1    9.1 %   49.2

¡ Others

   53.3    52.8    0.5    1.0 %   52.1    1.2    2.4 %   106.1

¨ Domestic long distance

   140.2    152.2    -11.9    -7.8 %   161.8    -21.6    -13.3 %   292.4

¡ Usage

   132.9    142.8    -9.9    -7.0 %   153.3    -20.5    -13.3 %   275.7

¡ Interconnection

   7.0    9.0    -2.0    -22.2 %   8.3    -1.2    -14.9 %   16.0

¡ Others

   0.3    0.3    0.0    7.4 %   0.3    0.1    32.3 %   0.6

¨ International long distance

   49.1    46.9    2.2    4.7 %   50.1    -1.0    -2.0 %   96.1

¨ International settlement

   47.6    49.7    -2.1    -4.3 %   42.4    5.1    12.0 %   97.2

¨ SoIP

   21.5    10.2    11.3    110.1 %   8.0    13.5    170.1 %   31.7

¨ VAS

   83.0    93.4    -10.4    -11.1 %   92.2    -9.2    -10.0 %   176.3

¨ Public telephone

   10.3    10.6    -0.4    -3.5 %   14.9    -4.6    -31.1 %   20.9

¨ 114 phone directory service

   28.0    32.1    -4.1    -12.8 %   29.6    -1.7    -5.7 %   60.0

¨ Others

   83.5    63.6    19.9    31.2 %   57.1    26.4    46.3 %   147.1

¡ Local, DLD

- QoQ and YoY decline in revenue from fall in subscribers and call traffic.

¡ SoIP

- QoQ and YoY increase due to rise in subscribers.

¡ Others

- QoQ and YoY increase due to rise in revenue affected by an increase in international ISDN.

 

 

6


LOGO

 

 

 

D. LM(Land to Mobile) Interconnection Revenue

 

     2008    2008    QoQ     2007    YoY     2008

(KRW bn)

   2Q    1Q    Amount    D%     2Q    Amount    D%     Cumm.

LM Revenue

   358.5    364.1    -5.7    -1.6 %   405.3    -46.9    -11.6 %   722.6

LM interconnection cost

   176.8    184.5    -7.7    -4.2 %   195.0    -18.3    -9.4 %   361.2

¡ LM Revenue

- QoQ and YoY decline due to decrease in subscribers and call traffic.

¡ LM Interconnection cost

- It takes approximately 2 months for operators to verify the actual volume of LM traffic. Thus figures for 2 months of every quarter are based on estimation, resulting in disparity with actual call traffic.

E. Wireless Revenue

 

     2008    2008    QoQ     2007    YoY     2008

(KRW bn)

   2Q    1Q    Amount    D%     2Q    Amount    D%     Cumm.

Wireless revenue

   428.8    419.9    8.9    2.1 %   399.4    29.4    7.4 %   848.7

¨ PCS resale

   426.9    418.2    8.6    2.1 %   393.3    33.5    8.5 %   845.1

¡ PCS service

   258.8    255.1    3.7    1.5 %   254.2    4.5    1.8 %   513.8

¡ Handset sales

   168.1    163.2    4.9    3.0 %   139.1    29.0    20.8 %   331.3

¨ Others

   2.0    1.7    0.3    18.1 %   6.1    -4.1    -67.9 %   3.6

¡ Wireless revenue

- Rise in PCS service revenue due to higher ARPU from increased 3G subscribers.

 

 

7


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F. Operating Expenses

 

     2008    2008    QoQ     2007    YoY     2008

(KRW bn)

   2Q    1Q    Amount    D%     2Q    Amount    D%     Cumm.

Labor

   627.4    683.3    -55.8    -8.2 %   627.0    0.4    0.1 %   1,310.7

¨ Salaries & wages

   450.6    476.8    -26.2    -5.5 %   450.1    0.5    0.1 %   927.4

¨ Employee benefits

   119.6    108.5    11.1    10.2 %   114.6    5.0    4.3 %   228.1

¨ Provision for retirement

   57.3    98.0    -40.7    -41.5 %   62.4    -5.1    -8.1 %   155.3

Commissions

   173.0    170.9    2.2    1.3 %   179.8    -6.8    -3.8 %   343.9

Marketing expenses

   330.0    326.3    3.7    1.1 %   331.5    -1.5    -0.4 %   656.3

¨ Sales commission

   228.8    230.1    -1.3    -0.6 %   248.8    -20.0    -8.1 %   458.9

¨ Sales promotion

   69.0    79.3    -10.3    -13.0 %   47.2    21.7    46.0 %   148.3

¨ Advertising

   32.3    16.9    15.3    90.4 %   35.4    -3.2    -9.0 %   49.2

Provision for doubtful accounts

   49.4    6.9    42.5    620.4 %   -0.4    49.8    N/A     56.2

Depreciation

   493.8    482.3    11.5    2.4 %   490.2    3.6    0.7 %   976.1

Repairs and Maintenance

   32.1    22.0    10.1    45.7 %   51.1    -19.1    -37.3 %   54.1

Cost of goods sold

   180.8    157.3    23.6    15.0 %   176.2    4.6    2.6 %   338.1

¨ PCS handset cost

   161.9    160.6    1.3    0.8 %   146.2    15.7    10.8 %   322.5

¨ Others

   18.9    -3.3    22.3    N/A     30.0    -11.1    -37.0 %   15.6

Cost of service provided

   481.0    476.8    4.2    0.9 %   482.5    -1.5    -0.3 %   957.8

¨ Cost of service

   235.6    226.5    9.0    4.0 %   235.6    0.0    0.0 %   462.1

¡ PCS resale network cost to KTF

   134.6    128.8    5.8    4.5 %   128.7    5.9    4.6 %   263.4

¡ SI service cost

   52.9    53.9    -1.0    -1.8 %   71.2    -18.3    -25.7 %   106.9

¡ Others

   48.0    43.8    4.2    9.6 %   35.7    12.3    34.6 %   91.8

¨ International settlement cost

   59.3    59.3    0.1    0.1 %   43.0    16.3    38.0 %   118.6

¨ LM interconnection cost

   176.8    184.5    -7.7    -4.2 %   195.0    -18.3    -9.4 %   361.2

¨ Others

   9.3    6.5    2.8    42.8 %   9.0    0.4    4.2 %   15.9

R&D

   57.2    56.8    0.4    0.6 %   54.7    2.5    4.5 %   114.0

Activation/installation and A/S cost

   92.1    96.5    -4.4    -4.6 %   84.5    7.6    9.0 %   188.7

Others

   144.5    154.9    -10.3    -6.7 %   149.1    -4.5    -3.0 %   299.4

CAPEX*

   624.6    395.3    229.3    58.0 %   536.9    87.7    16.3 %   1,019.9

 

* 2008.1Q CAPEX was settled as 395.3 billion(previously disclosed as 285.0bn)

¡ Labor

- QoQ decrease due to 1) lowered estimation in incentives based on the revised guidance and 2) decrease in voluntary resignation costs

¡ Provision for doubtful accounts

- QoQ and YoY increase due to disposal of bad debt and increase in unpaid balance.

¡ Depreciation

- QoQ and YoY rise due to increase in tangible assets.

¡ Repairs and Maintenance

- QoQ increase due to rise in telecommunication line facilities.

- YoY fall due to introduction of cost control program.

¡ COGS

- Rise in QoQ and YoY due to increased sales of servers, SoIP handsets and other one-time sales

 

 

8


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G. Non-operating Income

 

      2008    2008    QoQ     2007    YoY     2008

(KRW bn)

   2Q    1Q    Amount    D%     2Q    Amount    D%     Cumm.

Non-operating income

   133.8    134.3    -0.6    -0.4 %   103.6    30.2    29.2 %   268.1

¨ Gains on disposition of investments

   0.0    0.0    0.0    N/A     0.0    0.0    N/A     0.0

¨ Gains on disposition of tangible assets

   1.6    0.4    1.1    257.0 %   6.4    -4.9    -75.8 %   2.0

¨ Interest income

   25.8    18.2    7.6    41.6 %   31.3    -5.6    -17.8 %   43.9

¨ FX transaction gain

   5.2    6.3    -1.1    -17.9 %   0.7    4.6    694.3 %   11.6

¨ FX translation gain

   6.5    11.0    -4.4    -40.4 %   3.7    2.9    78.8 %   17.5

¨ Gain on equity method

   30.6    19.1    11.5    60.3 %   23.4    7.2    30.8 %   49.7

¨ Others

   64.1    79.3    -15.2    -19.2 %   38.1    26.0    68.4 %   143.4

H. Non-operating Expenses

 

      2008    2008    QoQ     2007    YoY     2008

(KRW bn)

   2Q    1Q    Amount    D%     2Q    Amount    D%     Cumm.

Non-operating expenses

   307.9    269.6    38.3    14.2 %   144.2    163.8    113.6 %   577.5

¨ Interest expense

   85.8    72.6    13.2    18.2 %   80.6    5.2    6.5 %   158.4

¨ FX transaction loss

   5.4    2.0    3.3    165.0 %   1.6    3.8    236.4 %   7.4

¨ FX translation loss

   88.0    108.4    -20.4    -18.8 %   -16.4    104.4    N/A     196.4

¨ Loss on equity method

   54.4    36.5    18.0    49.3 %   17.2    37.2    216.2 %   90.9

¨ Loss on disposition of fixed assets

   16.3    7.9    8.4    105.3 %   8.5    7.8    91.2 %   24.2

¨ Others

   58.0    42.2    15.8    37.5 %   52.7    5.4    10.2 %   100.2

¡ Interest expense and others

- The Korea Communications Commission ruled that KT pay on network usage fee for Toll Free Call(080) services to SKT and LGT. Total of 47.8 billion won was accounted as 1) interest expense of 12 billion won and 2) loss from prior-term adjustments of 35.8billion won.

¡ FX translation loss

- FX translation loss due to drop of won-dollar exchange rate

 

 

9

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