KT - Earnings call transcript Q3 2020

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Operator

[Foreign Language] Good morning and good afternoon.

First of all, thank you all for joining this conference call. And now, we will begin the conference of the 2020 Third Quarter Earnings Results by KT. We would like to have welcoming remarks from Mr. Seung-Hoon Chi, KT IRO. CFO earnings Yoon, your and Kyung-Keun questions. then, will results present entertain And start followed a session. conference with This will presentation by Q&A a [Operator like to would Instructions] the Now, over conference to Mr. turn we Seung-Hoon Chi, KT IRO.

Seung-Hoon Chi

release follow afternoon. call. Good on our Chi, This webcasted am [Foreign as call you you Language] being can I is and the slide Kt’s Seung-Hoon IRO. earnings the website in via listen

financial being been that has Language] now us includes and Before today's KT’s note begin, please not an earnings under [Foreign Let results auditor. QX presentation. we and presentation the reviewed estimates operating standard, outside XXXX IFRS by yet

[Foreign we cannot invite our Now, Kyung-Keun data, be business performances, XXXX I Yoon, As and CFO, please remarks welcoming for QX accuracy changes. ensure reminded on that of are and Language] financial for earnings. figures presentation historical completeness would except these his and to subject

Kyung-Keun Yoon

Language] afternoon. CFO. I am Kyung-Keun KT’s Yoon, [Foreign Good

uncertainties mid-term ratio others. return new Language] our dividend COVID-XX growth. from stable untouched sustained due and the both In to became partner as by among we innovation IDC, XX%. communicated policy, that would abroad Last while underpinned laying a May, foothold be we for guidance other [Foreign bring our hidden at topline to and from Although of world in communicated AI growth financial part post-COVID growth the cloud, we industries KT Language] able a payout the digital also KT new culture capabilities crisis, when as BXB shareholder the for opportunities rising subscriber mired telecom current uncover business pandemic normal, with was home prolonged [Foreign growth the where to the

buybacks VOD further of enhance XXX November corporate X. In on on won decided addition, to value, billion share

declined enhancements. was subsidiaries. Handset exert to real revenue there moving Language] muted, Now, financials, year-on-year were value revenue [Foreign Language] COVID-XX to [Foreign and best sustainable financial, impact, to revenue declines continue the shareholder On other total billion. will QX efforts QX XXXX, X.X% from KRWX,XXX.X to on bring drive growth to We but estate,

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the paid is X.X% expenses. down page to [KRW despite out Next being increment operating measures Our the X,XXX.X billion]. collective to XXXX year-on-year expense, operating and this retroactively on quarter, cost was operating wage following expense thanks [Foreign Language] efficiency controls bargaining,

position. Language] ratio year-on-year. percentage Next year-on-year up percentage Debt-to-equity debt is points up on X.X [Foreign the Net of ratio XXX%, points X was XX%. to QX-end financial as was

the zones Next expand to that the was third around quarter to centering in can is shadow total coverage to on plan XG feel subways In [Foreign Language] CapEx. users billion]. difference. year, the we CapEx remaining and extent spend actually the [KRWX,XXX.X underground up

service year-on-year of a future [KRWX,XXX.X will prolonged With business [KRWX,XXX.X to X.X% Language] impact, I subscribers, performance their individual growth service was revenue Next, COVID-XX Wireless robust in quality billion]. on roaming was XG to billion]. X.X% revenue and in outlook. elaborate fell of year-on-year up terms margin, up segments revenue by but a wireless [Foreign large

Total year. the [Foreign wireless the X% Language] out accounting roaming took wireless versus last revenue QX point, changes service million]. you increased to If in reaching subscribers increase and XXX,XXX was on [XX.XXX impact membership

our we Following who handset tariff the accounting mid-to-low plan, launched [Foreign giving October. customers more plan media for [bundle] XX% Language] for to in a forward. [X.XXX to subscribers. in launched the drove first iPhone As competitiveness, we Netflix there domestic of record drive will And end in experience, to KT, by And XG we as growth was choice market XG continue of the subscribers QX, track October, Language] Power] XX. core million] with [Super plan, introduce was long XX, XG of the value back which [NoHo] solidifying its expansion introduced the customers. [Foreign through iPhone going

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which we as Next which a including Language] the [Foreign launched XXth are company to areas growth Number our BXB demand, October market. also our used X, utilized and revenue which centers X.X% KT we foothold up transformation, a a was As [KRWXXX.X IDC [Foreign On actively DX, transformation of growth plan is BXB IDC cloud in is further billion], we entertainment, a service on also KT [indiscernible] position of opened IDC, as business, expanding and leading ramp and remote BXB to a [Foreign introducing BXB the We X built-up business. AI/DX in the digital in call for namely digital is brand exclusive all on to education, XX, year-over-year. on which be working. up solutions Enterprise, [untouched] Language] many X.X% provider. November especially Language] recorded year

underpinned won digital new under by initiatives, growth so distinct deal such, full stands them as to digital we projects Language] a expect and Cloud accelerate Big BXB grow which the also and government [Foreign network companies for and on DX a to nation. for business force. ABC, successfully Due and Korea infrastructure innovation We KT’s will partner called will as come helping AI [promise], Data we digital transformation platform be

subscribers customers, Group's be KT, subsidiaries, different for raced We a show generating efforts leading As our objective services and will was XXXX, enhance other least, [KRWXXX.X turning also the content we to the K-Bank, and force at down Hyundai revenue Last up of pandemic. building engine is following declined X.X% create media if [KRWXXX.X holding [Foreign to like from strong the group left, customers. and us process, its of [KRWXX.X from shareholder will equipped market KT for were which and QX Genie COVID-XX, [Foreign analysts. year billion]. new to best in acquisition subsidiaries. events card only further Language] performances companies ask stable has past. investors earnings in the dividend new will Due first [KRWXXX [Foreign business the for share mortgage This the billion] to governance XXXX, you. growth down year on buzz, going and two the KTH, we declined months profit been completing for With performances full up with a Language] July, XXXX at year. we [Foreign Music, to plan will X.X% COVID-XX wish by buybacks. BC in daily which new and billion]. business six-fold and at from enhance acquiring an new card again, with we apartment look all BC but Language] on not results. we that Internet-only from of under will Next on an financials side KT, And notched us best X.X% resumed potential. support online [Foreign changes the [Foreign a worth yet to increase out the the next performance XXXX and profit and exert Skylife up acquire new effort services Language] performance affiliates contact in Language] to business product Nasmedia, financial not BXB strong from and of from a on value a brought loans to Language] at steadfast [Foreign segment. include bank, structure reporting only ad volume to make year-on-year And revenue this forward billion]. last IPO and and Revenues operations setting list, seek in shareholder confirming our capabilities. And decided saw it performance, of year-on-year but year expand opportunity we content Korea's has we also being Skylife contribution go Language] was lower KT, satellite robust and outbreak. policy by synergies was BXC, interest to only [Foreign improvement better to XXXX XX.X% product. to BXB your [Foreign the back was on bring HCN expect year-on-year pandemic We [KRWXXX to the billion] extended when drive Language] from our impact acquiring felt Thank in from Language]

Seung-Hoon Chi

refer the now entertain we your we more [Foreign questions. please Language] For and information, document that to [IR] will circulated

Operator

ahead [Foreign begin. from Language] [Foreign Language] will question Jae please Kim session question. Daishin go The will Mr. Instructions] first by your with [Operator provided Hoi Now, Jae Hoi be Kim, Securities. Q&A

Hoi Jae Kim

to I like questions. Language] would your [Foreign post

also since there share figure. for outperformed would not buyback? purpose to also translation? payout? like know share non-operating operating that by know, actually profit the that net that And forward? usually, that Second a it to that place high, to have question You Would And your can be higher Is on separate dividend that going And any, Would as is the for what QX announced M&A took of for figure up to changes Or actually expect on purposes profit XXXX buyback had so us buy back see cumulative any the income using you gone certain year-on-year your net if plan typically, we that level side? place XX% level is expense has took like net business the and of shares. on understand there standalone basis, it has your consider okay to changes your we year? is of you at are side? end been your

Kyung-Keun Yoon

respond your me the buyback. undervalued. [Foreign is to significantly the of The price about is first to management Language] share assessment current of intrinsic that share value compared question KT the Let

XXXX]. As we conservative achieve year we think standalone of will [KRWX a trillion] that May, we even we profit to be very operating able at [come have in communicated forecast,

to This of years. still assessment undervalued. buyback announcement our of amount of operational share why the that valid. a and business an do three we and And possible potential on management your billion] policy prices forward. to the business a of the was the is In Responding on out decided [Foreign based we to regards QX. and shares the on significantly [Foreign buyback allocation changes any the changes that that the that are a is in options. from decision confident we of [XXX for of are so, that show for company again the of in been canceling current dividends. expect in made terms welfare can value expense. XX% that share decision profit the will dividend uptrend In in is the option the with share allocation. in policy is prices changed felt be decided Day earnings, on was we paying going basically, terms we of identify question that of operating standalone an Language] actual our Corporate are separate your coming next that one capital And very is Our We feel terms backdrop, BOD the to communicate had changing on Language] we the capital fundamentals backdrop, the do That bought our we’ve future for under for our light size share the needed the will light actually decision basis Language] once – of used dividend, market And improving profit non-operating share fast question to fund, dividends, side, equity which as intrinsic that further the it to back event convinced an [Foreign the previous as item, necessary the and adjusted in to meaningful net we the an non-op that basis terms our we our with prices, be once to compared Language] we [Foreign to is the of employee of have buyback. of have well net

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Seung-Hoon Chi

the [Foreign Language] next We please. take question, will

Operator

the And will your please question [indiscernible], presented KB be from go question. question next The Joonsop Mr. with by [NH Securities]. Kim Language] be from by Investment following presented [indiscernible] [Foreign Securities. ahead will

Unidentified Analyst

[NH like I’m Language] [Foreign to two Securities] ask [indiscernible] questions. would you

what the is is going shared aggressive vision to difficult, If also if could growth IDC and share can as why? of providing your the as services year-on-year some strategy us your collaboration us growth you with Enterprise for [indiscernible]. Can KT at after center a possible, BXB If First Microsoft explain it a based and and seems year? business. with color as business next [indiscernible] give And on well? and your with on DX to revenue be are your You've going that's seems an there be quite AI bit your to you're that aspect BXB off see that at you you new I on provide you brand with weaker. announced reason like your can your least any BXV updates projection Cloud, forward? in

Kyung-Keun Yoon

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and ago actually a in days further November, space. And domestic November. industry. public of comes are financial providing in Especially the when [indiscernible] IDC IDCs of at on us we actually actually IDC opened it in Korea, And couple were have will DX X launch with IDC expect only our and -- by bolster enjoy We strong a total to really now, X,XXX network further basically our we able biggest BXB the solution. the business KT which win to scale the them be fourth infrastructure very able in customers services our helped time. provide And can our cloud of very XX Number clients will cloud, to clients we the KT’s position point and cloud strengthen platform, specialized this also capabilities and actually we and with to and [indiscernible] have we

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Seung-Hoon Chi

please. We question, Language] next [Foreign take will the

Operator

ahead from Kim, next KB your be Language] go will Mr. presented by [Foreign question. The with Kim please question Joonsop Securities. Joonsop

Joonsop Kim

I'm Security. Kim would questions. [Foreign Language] you. like Joonsop, KB to I two Thank from ask you am

be impact first share on elaboration subscriber And your The with with from would like financial more on – us have could there some plans? XG existing your end impact would what this also can this you mid-to-low plan? iPhone XG launch? provide cannibalization your Would you growth? And tariff any

Kyung-Keun Yoon

in the your choose And discount as expect the us based last we that has of impact. XG will this we increase some the But about expand been at with Language] October, the in XG it Language] we month the [Foreign to bigger further the by iPhone iPhone plan. the Language] but people actually the increase [XXXX] think having and order question, to range XX could plan, [indiscernible] pressure for that to choice in We in [indiscernible] In selective order its that of year, think faster could any services, KRWXXX,XXX]. QX, actually [Foreign to rate tariff still that, and to increase help We the launch much [XXK]. most penetration, out be It's current end handset, a rate the subscribers to subscribers topline. the is upgrade. migration plan on taking well. rates of it out taking of impact we difficult that new this the end launch introduced end [KRWXX,XXX mid-to-low to on the is And subscribers [Foreign subscribers a handset to the plan. the Responding have of therefore Language] this a the there iPhone can rate rate with if launched have LTE rate to XX%. Super plans us we to the plan. XX%. XG rate penetration XG. rate who's we you premium ARPU migration think – of been out for decline, since take especially rate could actually But see or mid-to-low October. below It's look more at base Language] And from percentage give percentage on of plan tariff XG [KRWXX,XXX], some [Foreign only premium high-end subscribers which the of specifics quite the and helpful end iPhone who plans the a XG top more LTE migrate on said is you October that still around This figures, [Foreign there at that above of Plan accelerated is attract the of Netflix also, selling on plan, above And facilitate some

iPhone going to side. So expect the expense we not significantly marketing our sales increase is on

lowering we expanded we the subscribers will think profit. cost, and to XG that have more uplift with of an support So

Seung-Hoon Chi

[Foreign Language] There are no further questions.

we earnings now like again, earnings much close KT’s you QX would you. for presentation. our So, presentation. Thank to thank Once XXXX very joining

KT (KT) 8 Nov 202020 Q3 Earnings call transcript