6-K 1 d648617d6k.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 November 2018

Commission File Number 1-14926

 

 

KT Corporation

(Translation of registrant’s name into English)

 

 

90, Buljeong-ro,

Bundang-gu, Seongnam-si,

Gyeonggi-do,

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   ☒            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  ☒

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: November 2, 2018
KT Corporation
By:   /s/ Seunghoon Chi
Name: Seunghoon Chi
Title: Vice President
By:   /s/ Youngkyoon Yun
Name: Youngkyoon Yun
Title: Director


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PEOPLE.
TECHNOLOGY.
KT ’18 3Q Earnings Release
2018. 11. 2 | Investor Relations


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Disclaimer
This presentation has been prepared by KT Corp.(the “Company”). This presentation contains forward-looking statements, which are subject to risks, uncertainties, and assumptions. This presentation is being presented solely for your information and is subject to change without notice. No presentation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, actuality, fairness, or completeness of the information presented.
KT Corp has applied new accounting standard of ‘K-IFRS 1115’ as of Jan 1st, 2018. Accordingly, we have elected the modified retrospective approach which will recognize the cumulative impact of the new standard as an adjustment to retained earnings as at January 1 2018, the period of initial application. That said, there are no obligation to apply the new standard to previous financial statements.
In this material, despite the new accounting standard, we have included the restated figures for 2018 prepared under IFRS 1018 (old-standard) for investors’ understandings. The restated figures are followed by ‘*’ marking. However, please be noted that these restated figures have not been audited or reviewed by external auditors.
If you have any related questions to this material, please contact IR department.
Tel : 82-2-3495-3512, 3254, 3564, 3976, 5343
Fax : 82-2-3495-5917


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Contents
1 3Q18 Highlight
2 Financial Highlights
3 Business Overviews
4 Q&A
5 Appendix


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Contents
1 3Q18 Highlight
2 Financial Highlights
3 Business Overviews
4 Q&A
5 Appendix


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1 3Q18 Highlight
Sustained revenue and subscriber growth despite regulation on wireless services
Service development in platform business (AI, smart energy, security, etc.) for securing long-term growth momentum, preparing for the upcoming 5G era
High-quality subscriber growth supported by tailored services and network quality
- MNO net adds of 204K with 70% of new subscribers choosing ‘DataON’ pricing plan
- GiGA penetration of 54% with broadband revenue up by 2.3% YoY (stand-alone, old std.)
- Launch of ‘Kidsland 2.0’, specialized service for early childhood education and care,
IPTV net adds of 103K with revenue up by 15.3% YoY (stand-alone, old std.)
Toward intelligent media platform with GiGA Genie subscribers of 1.2M
- Launched voice command TV, voice shopping* , new education programs and AI apartment/hotels via GiGA Genie, enhancing customer experience
*making purchases through verbal commands
5G preparation with service reinforcement in energy/security/next-generation media
- Started ‘5G Open Lab’ with various firms to foster 5G ecosystem and service development
- Enhanced service quality and coverage of ‘GiGA Energy Manager’, ‘GiGAeyes’, VRIGHT, etc.


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Contents
1 3Q18 Highlight
2 Financial Highlights
3 Business Overviews
4 Q&A
5 Appendix


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K-IFRS / Consolidated 2-1 Financial Highlights Income Statement (Unit: KRW bn) Operating Revenue 3Q17* 2Q18* 3Q18* QoQ YoY 2Q18 3Q18 QoQ Operating Revenue 5,826.6    5,882.4    5,986.0    1.8%    2.7%    5,806.9    5,948.5    2.4% Service Revenue KRW 5.14tn, YoY +1.8% Service Revenue    5,047.2    5,050.2    5,138.2    1.7%    1.8%    5,003.6    5,096.9    1.9% Merchandise Revenue    779.3    832.2    847.8    1.9%    8.8%    803.4    851.5    6.0% Operating Expense    5,449.3    5,505.4    5,665.2    2.9%    4.0%    5,407.8    5,579.0    3.2% Operating Income KRW 320.8bn,YoY -15.0% Net Income KRW 201.0bn, YoY -0.8% EBITDA KRW 1.14tn, YoY -6.5% Operating Income    377.3    376.9    320.8    -14.9%    -15.0%    399.1    369.5    -7.4% Margin (%) 6.5% 6.4% 5.4% -1.0%p -1.1%p 6.9% 6.2% -0.7%p Non-operating Income/Loss -60.5 -14.6 -39.1 Deficit Increased Deficit Decreased -7.9 -35.4 Deficit Increased Income before Taxes 316.7 362.4 281.6 -22.3% -11.1% 391.2 334.0 -14.6% Net Income 202.6 256.9 201.0 -21.8% -0.8% 280.7 239.5 -14.7% Margin (%) 3.5% 4.4% 3.4% -1.0%p -0.1%p 4.8% 4.0% -0.8%p EBITDA 1,215.1 1,199.0 1,136.2 -5.2% -6.5% 1,221.2 1,184.9 -3.0% Margin (%) 20.9% 20.4% 19.0% -1.4%p -1.9%p 21.0% 19.9% -1.1%p * IFRS 1018 applied (old-standard) : Restated figures have been provided for investors’ understanding. The figures have not been audited or reviewed by external auditors. (applies to other slides)


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2-2 Financial Highlights K-IFRS / Consolidated Operating Expenses Operating Expenses KRW 5.67tn, YoY +4.0% Labor Cost KRW 930.2bn, YoY +9.6% General Expense KRW 2.49tn, YoY +0.5% Cost of Service Provided KRW 678.8bn, YoY +12.5% Cost of Merchandise KRW 938.9bn, YoY +1.6% (Unit: KRW bn) 3Q17* 2Q18* 3Q18* QoQ YoY 2Q18 3Q18 QoQ Operating Expenses 5,449.3 5,505.4 5,665.2 2.9% 4.0% 5,407.8 5,579.0 3.2% Labor Cost 848.5 989.6 930.2 -6.0% 9.6% 987.5 930.1 -5.8% General Expense 2,481.1 2,466.6 2,492.8 1.1% 0.5% 2,454.6 2,494.6 1.6% Cost of Service Provided 603.3 609.8 678.8 11.3% 12.5% 609.8 678.8 11.3% Selling Expense 592.1 530.5 624.5 17.7% 5.5% 447.8 536.6 19.8% Cost of Merchandise 924.4 908.2 938.9 3.4% 1.6% 908.2 938.9 3.4% Marketing Expenses KRW 674.7bn, YoY -0.4% (Unit: KRW bn) 3Q17* 2Q18* 3Q18* QoQ YoY Marketing Expenses 677.7 674.6 674.7 0.0% -0.4% KT Separate, Profit from handset sales adjusted / Selling expenses + Advertising expenses


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2-3 Financial Highlights K-IFRS / Consolidated Financial Position Equity increase on IFRS15 application Cumulative impact reflected in Jan. 1st, 2018 retained earnings Debt Position Borrowings: KRW 6.37tn New Debt: KRW 3.65tn Debt Ratio Debt to Equity: 124.1% Net Debt to Equity: 25.1% 3Q 17* 2Q 18 3Q 18 QoQ YoY Assets 29,373.0 29,968.0 32,644.5 8.9% 11.1% Cash & Cash Equivalents 2,168.6 2,249.7 2,718.1 20.8% 25.3% Liabilities 16,085.9 15,665.2 18,077.3 15.4% 12.4% Borrowings 6,848.2 6,604.5 6,370.2 -3.5% -7.0% Equity 13,287.1 14,302.8 14,567.2 1.8% 9.6% Capital Stock 1,564.5 1,564.5 1,564.5 0.0% 0.0% Net Debt 4,679.6 4,354.8 3,652.1 -16.1% -22.0% Debt / Equity 121.1% 109.5% 124.1% 14.6%p 3.0%p Net Debt / Equity 35.2% 30.4% 25.1% -5.4%p -10.1%p
Debt to Equity
Net Debt to Equity


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2-4 Financial Highlights K-IFRS / Consolidated CAPEX (Unit: KRW bn) Cumulative CAPEX in 2018 KRW 1.11tn executed Executed 48.2% of 2018 Guidance CAPEX Breakdown Access Network: KRW 579.1bn Backbone Network: KRW 226.4bn B2B: KRW 188.7bn Others: KRW 1,142bn 2018 Guidance KRW 2.3tn Access Network Backbone Network B2B Others


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Contents 1 3Q18 Highlight 2 Financial Highlights 3 Business Overviews 4 Q&A 5 Appendix


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3-1 Business Overview K-IFRS / Consolidated Wireless Wireless down by 2.1% YoY Service revenue declined on increased take-up of ‘selective tariff discount’ and uplifted discount rate, YoY -2.5% (Unit KRW bn) 3Q17* 2Q18* 3Q18* QoQ YoY 2Q18 3Q18 QoQ Wireless 1,816.6 1,786.2 1,778.6 -0.4% -2.1% 1,763.7 1,760.1 -0.2% Service 1,700.6 1,667.2 1,657.4 -0.6% -2.5% 1,644.7 1,638.9 -0.4% Interconnection 116.0 119.0 121.2 1.9% 4.5% 119.0 121.2 1.9% [Wireless Subscriber] (Unit: 1,000) Net addition and LTE penetration continues Wireless net adds of 258K Net subscriber addition continues with successful launch of new pricing plan ‘Data ON’ LTE penetration reached 79.4% 20,378 20,662 20,920 18,892 19,234 19,521 19,795 20,015 79.4% 77.9% 78.5% 76.7% 77.2% 75.5% 75.9% 76.2% 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Subscribers % of LTE


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3-2 Business Overview K-IFRS / Consolidated Wireline Wireline down by 1.5% YoY (Unit: KRW bn) 3Q17* 2Q18* 3Q18* QoQ YoY 2Q18 3Q18 QoQ Wireline 1,218.0 1,196.3 1,200.0 0.3% -1.5% 1,181.5 1,186.4 0.4% Telephony 452.0 433.2 421.7 -2.7% -6.7% 432.5 421.1 -2.6% Broadband 503.3 508.9 512.8 0.8% 1.9% 494.7 499.7 1.0% Line lease 262.7 254.2 265.5 4.4% 1.1% 254.3 265.5 4.4% Broadband Revenue up by 1.9% YoY with GiGA subscriber expansion despite interconnection rate decline Revenue–excluding interconnection up by 3.4% YoY [Broadband Subscriber] (Unit: 1,000) 8,640 8,708 8,758 8,653 8,659 8,698 8,516 8,573 51.9% 54.2% 48.9% 44.9% 41.5% 37.5% 33.0% 28.5% 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Subscribers % of GiGA Telephony Revenue down by 6.7% YoY on cord-cutting and usage drop


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K-IFRS / Consolidated 3-3 Business Overview Media/Contents (Unit KRW bn) Media/Contents up by 9.2% YoY 3Q17* 2Q18* 3Q18* QoQ YoY 2Q18 3Q18 QoQ Media/Contents 572.6 604.2 625.3 3.5% 9.2% 595.2 616.2 3.5% Media Media 464.5 495.3 501.9 1.3% 8.0% 487.3 493.2 1.2% IPTV net adds of 100K for 3 consecutive quarters Contents 108.0 108.9 123.4 13.3% 14.2% 107.9 123.0 14.0% Media revenue up by 8.0% YoYon high-quality subscriber expansion and platform revenue increase [IPTV Subscriber] (Unit: 1,000) Contents 7,042 7,161 7,280 7,397 7,472 7,573 7,672 7,775 Up by 14.2% YoY on T-commerce revenue growth of KTH Number of IPTV subscribers differs from MSIT’s release that applies “Combined Market Share Regulation” under the IPTV law. (KT’s average(6-month average) pay TV subscribers as of 2H17 are 6,339,759.)


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K-IFRS / Consolidated 3-4 Business Overview Finance and Others Finance up by 1.0% YoY 3Q17* 2Q18* 3Q18* QoQ YoY 2Q18 3Q18 QoQ Finance 873.9 866.7 882.3 1.8% 1.0% 866.7 882.3 1.8% Other Services 566.2 596.8 652.0 9.3% 15.2% 596.5 652.0 9.3% IT / Solution 244.5 261.6 273.0 4.4% 11.6% 261.6 273.0 4.4% Other Services up by 15.2% YoY Real Estate 104.8 107.7 141.3 31.2% 34.8% 107.7 141.3 31.2% Other Services revenue up on IDC and real estate growth Others 216.8 227.5 237.7 4.5% 9.6% 227.3 237.7 4.6% Merchandise up by 8.8% YoY Merchandise Revenue 779.3 832.2 847.8 1.9% 8.8% 803.4 851.5 6.0% Finance revenue up on increased domestic transactions of BC Card (Unit: KRW bn)


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Contents 1 3Q18 Highlight 2 Financial Highlights 3 Business Overviews 4 Q&A 5 Appendix


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Contents
1 3Q18 Highlight
2 Financial Highlights
3 Business Overviews
4 Q&A
5 Appendix


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5-1 K-IFRS Income Statement Consolidated 3Q 17* 4Q 17* 1Q 18* 2Q 18* 3Q 18* 1Q 18 2Q 18 3Q 18 Operating revenue 5,826.6 6,106.6 5,837.9 5,882.4 5,986.0 5,710.2 5,806.9 5,948.5 Service revenue 5,047.2 5,058.2 4,921.7 5,050.2 5,138.2 4,863.6 5,003.6 5,096.9 Wireless 1,816.6 1,811.4 1,777.9 1,786.2 1,778.6 1,740.8 1,763.7 1,760.1 Fixed line 1,218.0 1,202.6 1,212.4 1,196.3 1,200.0 1,198.8 1,181.5 1,186.4 Media/Contents 572.6 584.8 561.7 604.2 625.3 554.2 595.2 616.2 Finance 873.9 892.8 832.7 866.7 882.3 832.7 866.7 882.3 Others 566.2 566.6 537.0 596.8 652.0 537.1 596.5 652.0 Merchandise rev. 779.3 1,048.4 916.1 832.2 847.8 846.6 803.4 851.5 Operating expense 5,449.3 5,972.8 5,402.7 5,505.4 5,665.2 5,313.1 5,407.8 5,579.0 Service expense 4,524.9 4,804.7 4,458.3 4,597.3 4,726.4 4,368.6 4,499.6 4,640.2 Labor expense 848.5 978.0 923.5 989.6 930.2 922.1 987.5 930.1 General expense 2,481.1 2,536.4 2,363.6 2,466.6 2,492.8 2,353.1 2,454.6 2,494.6 Cost of svc provided 603.3 676.4 649.7 609.8 678.8 649.7 609.8 678.8 Selling expense 592.1 613.8 521.4 530.5 624.5 443.7 447.8 536.6 Merchandise cost 924.4 1,168.1 944.4 908.2 938.9 944.4 908.2 938.9 Operating income 377.3 133.7 435.1 376.9 320.8 397.1 399.1 369.5 N-OP income (loss) -60.5 -247.3 -47.2 -14.6 -39.1 -44.1 -7.9 -35.4 N-operating income 120.7 235.6 128.7 210.5 100.3 130.0 211.3 101.0 N-operating expense 183.7 469.1 174.9 226.3 136.5 173.2 220.5 133.5 Equity method (G/L) 2.4 -13.9 -1.0 1.2 -3.0 -1.0 1.2 -3.0 Income bf taxes 316.7 -113.6 388.0 362.4 281.6 353.0 391.2 334.0 Income tax 114.1 9.9 135.4 105.4 80.6 128.9 110.5 94.6 Income from con. Op 202.6 -123.5 252.5 256.9 201.0 224.1 280.7 239.5 Income from discon. op 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net income 202.6 -123.5 252.5 256.9 201.0 224.1 280.7 239.5 NI contribution to KT 179.9 -126.1 227.5 229.5 184.8 197.0 251.0 222.5 EBITDA 1,215.1 968.8 1,266.9 1,199.0 1,136.2 1,228.9 1,221.2 1,184.9 EBITDA Margin 20.9% 15.9% 21.7% 20.4% 19.0% 21.5% 21.0% 19.9% KT Separate 3Q 17* 4Q 17* 1Q 18* 2Q 18* 3Q 18* 1Q 18 2Q 18 3Q 18 Operating revenue 4,312.0 4,575.3 4,418.4 4,344.7 4,402.7 4,297.2 4,283.0 4,358.2 Service revenue 3,607.5 3,570.0 3,555.1 3,622.7 3,619.7 3,501.5 3,581.4 3,582.3 Wireless 1,791.2 1,782.5 1,751.3 1,758.9 1,751.2 1,713.8 1,735.5 1,731.4 Fixed line 1,210.1 1,186.5 1,197.9 1,189.3 1,186.3 1,186.5 1,176.4 1,174.7 Media 311.6 317.6 323.1 361.9 359.2 318.7 357.2 353.5 Other service 294.7 283.4 282.8 312.7 323.1 282.5 312.3 322.6 Merchandise rev. 704.5 1,005.3 863.3 722.0 783.0 795.6 701.6 775.9 Operating expense 4,040.6 4,514.9 4,078.8 4,067.5 4,184.9 3,992.2 3,975.4 4,077.6 Service expense 3,278.5 3,473.3 3,227.9 3,348.5 3,403.8 3,141.3 3,256.4 3,296.6 Labor expense 491.0 575.3 526.9 599.0 540.4 526.9 599.0 540.4 General expense 1,687.6 1,779.0 1,633.4 1,671.2 1,675.4 1,627.8 1,658.8 1,658.3 Cost of svc provided 509.2 507.6 519.0 518.1 540.4 519.0 518.1 540.4 Selling expense 590.7 611.3 548.5 560.2 647.6 467.6 480.5 557.5 Merchandise cost 762.0 1,041.7 850.9 718.9 781.0 850.9 718.9 781.0 Operating income 271.4 60.4 339.6 277.2 217.8 305.0 307.7 280.6 N-OP income (loss) -46.2 -205.2 124.3 -27.9 -7.9 127.3 -21.3 -4.2 N-operating income 106.6 200.8 283.5 185.2 104.6 284.8 186.0 105.2 N-operating expense 152.7 406.0 159.2 213.1 112.4 157.5 207.2 109.4 Income bf taxes 225.3 -144.8 463.9 249.3 210.0 432.2 286.4 276.4 Income tax 77.3 -14.8 123.9 66.6 56.0 115.4 76.5 73.8 Net income 148.0 -130.1 340.0 182.8 153.9 316.8 209.9 202.6 EBITDA 1,021.8 805.7 1,081.3 1,009.0 940.3 1,046.6 1,039.4 1,003.1 EBITDA Margin 23.7% 17.6% 24.5% 23.2% 21.4% 24.4% 24.3% 23.0% * K-IFRS 1018 (old-standard)


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5-2 K-IFRS Balance Sheet (Unit: KRW bn) Consolidated 1Q 17* 2Q 17* 3Q 17* 4Q 17* 1Q 18 2Q 18 3Q 18 Asset 30,102.6 27,825.5 29,373.0 29,580.6 30,467.8 29,968.0 32,644.5 Current assets 9,858.1 7,592.8 9,354.1 9,522.1 10,928.3 10,696.9 13,662.5 Cash & cash equi. 2,002.1 1,656.5 2,168.6 1,928.2 1,777.5 2,249.7 2,718.1 Trade & other rec 3,196.7 3,384.9 3,440.8 3,555.9 3,486.4 3,589.8 3,800.8 Inventories 499.0 420.0 346.7 457.7 716.0 594.5 503.5 Other current asset 4,160.2 2,131.6 3,398.0 3,580.4 4,948.5 4,262.9 6,640.1 -Prepaid_Contract cost - - - - 987.2 1,037,8 1,070.5 -Contract assets - - - - 313.1 298.4 305.2 Non-current assets 20,244.5 20,232.7 20,018.9 20,058.5 19,539.5 19,271.1 18,982.0 Trade & other rec 609.6 647.8 629.8 800.6 689.2 770.1 678.8 P.P.E 13,865.5 13,409.7 13,288.5 13,562.3 13,161.7 13,000.0 12,855.3 Other current asset 5,769.4 6,175.2 6,100.5 5,695.6 5,688.5 5,501.0 5,448.0 -Prepaid_Contract cost - - - - 343.5 362.6 368.5 -Contract assets - - - - 74.0 79.3 92.9 Liabilities 17,319.3 14,771.1 16,085.9 16,504.3 16,458.0 15,665.2 18,077.3 Current liabilities 9,714.6 7,275.8 8,815.7 9,458.1 9,437.6 9,101.5 11,169.1 Trade & other payables 7,384.0 5,626.9 6,672.0 7,355.5 6,972.4 6,197.7 8,698.2 Short-term borrowings 1,647.5 988.7 1,586.0 1,573.5 1,534.3 1,940.0 1,417.0 Others 683.1 660.2 557.6 529.1 931.0 963.8 1,053.8 -Contract liabilities - - - - 270.8 281.0 289.3 Non-current liabilities 7,604.7 7,495.4 7,270.2 7,046.1 7,020.4 6,563.7 6,908.2 Trade & other payables 886.9 894.1 900.6 893.1 667.9 661.0 658.2 Long-term borrowings 5,697.7 5,536.3 5,262.2 5,110.2 5,155.0 4,664.5 4,953.2 Others 1,020.0 1,065.0 1,107.5 1,042.8 1,197.5 1,238.2 1,296.8 -Contract liabilities - - - - 52.1 45.8 42.1 Equity 12,783.3 13,054.4 13,287.1 13,076.4 14,009.8 14,302.8 14,567.2 Retained earnings 9,657.9 9,877.3 10,056.5 9,854.2 10,726.0 10,973.6 11,202.2 KT Separate 1Q 17* 2Q 17* 3Q 17* 4Q 17* 1Q 18 2Q 18 3Q 18 Asset 23,677.2 22,881.3 23,381.9 23,334.9 24,639.8 24,378.2 24,808.6 Current assets 4,502.2 3,954.2 4,603.1 4,379.6 6,312.7 6,266.7 6,976.1 Cash & cash equi. 1,102.6 911.6 1,323.8 1,166.4 1,064.1 1,464.3 1,832.5 Trade & other rec 2,563.5 2,617.5 2,601.6 2,740.3 2,847.6 2,827.7 2,818.8 Inventories 287.2 205.3 142.3 232.2 450.7 360.4 298.5 Other current asset 548.8 219.7 535.4 240.6 1,950.3 1,614.4 2,026.4 -Prepaid_Contract cost - - - - 1,005.8 1,048.7 1,090.8 -Contract assets - - - - 289.1 274.7 282.5 Non-current assets 19,175.1 18,927.1 18,778.9 18,955.4 18,327.1 18,111.6 17,832.5 Trade & other rec 541.7 581.7 556.8 735.7 624.1 705.1 611.1 P.P.E 11,538.2 11,117.3 11,074.7 11,375.0 11,008.2 10,777.8 10,645.3 Other current asset 7,095.2 7,228.1 7,147.3 6,844.6 6,694.9 6,628.7 6,576.1 -Prepaid_Contract cost - - - - 331.4 336.9 349.8 -Contract assets - - - - 64.0 69.3 82.5 Liabilities 12,492.0 11,533.4 11,878.7 12,023.8 12,304.3 11,853.1 12,075.2 Current liabilities 5,636.5 4,741.9 5,338.2 5,596.7 5,883.2 5,927.6 5,806.1 Trade & other payables 3,842.5 3,653.6 3,733.4 4,109.5 4,074.7 3,602.2 3,887.7 Short-term borrowings 1,433.4 712.4 1,336.6 1,298.5 1,230.1 1,688.7 1,179.3 Others 360.6 376.0 268.3 188.6 578.4 636.7 739.1 -Contract liabilities - - - - 274.4 280.0 287.4 Non-current liabilities 6,855.5 6,791.5 6,540.5 6,427.2 6,421.1 5,925.5 6,269.1 Trade & other payables 942.9 945.0 946.3 958.2 728.4 711.1 706.2 Long-term borrowings 5,370.6 5,278.5 5,006.7 4,914.4 5,007.5 4,515.1 4,815.8 Others 542.0 568.0 587.4 554.6 685.2 699.4 747.1 -Contract liabilities - - - - 47.6 41.7 38.8 Equity 11,185.2 11,347.9 11,503.2 11,311.1 12,335.5 12,525.1 12,733.4 Retained earnings 9,242.1 9,400.9 9,548.3 9,344.5 10,380.4 10,587.3 10,788.8 * K-IFRS 1018 (old-standard)


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5-3 Subscribers K-IFRS / Separate Wireless 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 QoQ YoY Subscribers (Unit: 1,000)1) Total (LTE+WCDMA) 19,234 19,521 19,795 20,015 20,378 20,662 20,920 1.2% 5.7% Net additions 342 287 274 220 363 284 258 -9.2% -6.0% Gross additions 1,243 1,225 1,270 1,264 1,211 1,160 1,200 3.4% -5.5% Deactivation2) 901 938 996 1,043 848 876 977 10.1% -4.2% Churn rate 1.6% 1.6% 1.7% 1.7% 1.4% 1.4% 1.5% -0.1%p -0.2%p LTE 14,608 14,869 15,179 15,462 15,867 16,224 16,612 2.4% 9.4% LTE Penetration rate 75.9% 76.2% 76.7% 77.2% 77.9% 78.5% 79.4% 0.9%p 2.7%p ARPU (KRW)3) 34,537 34,554 34,608 34,077 32,993 32,733 32,3724) -1.1% -6.5% Note 1) Subscribers: MSIT’s new guidelines for subscriber disclosure (Retroactively applied from 1Q14, MVNO included) Note 2) Deactivation: Mandatory deactivation included Note 3) ARPU = Wireless revenue* / Wireless subscribers** * Wireless revenue(3G, LTE and IoT included):Revenue of Voice and Data usage (Interconnection/Subscription fee excluded), VAS, Contract/ Bundled Discounts, and etc. included ** Wireless subscribers: Based on MSIT’s guidelines for average billed subscribers in quarter Note 4) ARPU based on old standard (New standard wireless (ARPU 32,028) Wireline 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 QoQ YoY Subscribers (Unit:1,000) Telephony 16,129 16,045 15,815 15,610 15,478 15,343 15,163 -1.2% -4.8% PSTN 12,679 12,576 12,376 12,201 12,080 11,949 11,786 -1.4% -4.8% VoIP 3,450 3,469 3,439 3,409 3,398 3,394 3,377 -0.5% -1.8% Broadband 8,573 8,640 8,708 8,758 8,653 8,659 8,698 0.4% -0.1% IPTV (OTV+OTS) 7,161 7,280 7,397 7,472 7,573 7,672 7,775 1.3% 5.1% Number of IPTV subscribers differ from MSIT’s release that applies “Combined Market Share Regulation” under the IPTV law. (KT’s average(6-month average) pay TV subscribers as of 2H17 are 6,339,759)


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