KT - Earnings call transcript Q2 2021

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Operator

Good morning and good evening. Thank you all for joining this conference call. And now we will begin the conference of the 2021 Second Quarter Earnings Results by KT. We would like to have welcoming remarks from KT IRO, Mr. Seung Chi; and then CFO, Mr.

earnings entertain present questions. will Kim, results your and Young-Jin followed with Q&A This start presentation by conference will the a session. [Operator Instructions].

Chi. Now the we Seung conference turn over to would KT IRO, like to Mr.

Chi Seung-Hoon

IRO. afternoon. This being Good through and as the website, can our Chi on you am Seung-Hoon, listen webcasted earnings call in is I release currently follow slides you KT's the call.

KT's QX XXXX presentation. begin earnings now us Let

not please K-IFRS estimates begin, we have been and standards note the results under presentation an financial Before by that includes operating and outside yet reviewed today's auditor.

except of As historical we and that to accuracy be cannot subject these please ensure financial changes. completeness and figures are business data, performances, reminded for

Young-Jin, Now his QX and welcoming I remarks on invite will CFO, Kim for presentation earnings. our 'XX

Young-jin Kim

Kim KT's Young-Jin, is CFO. afternoon. Good This

for the quarter, revenue group up reporting improvement core up XX.X% KRWXXX.X key year-on-year. its and XXXX. noteworthy not KRWXXX.X basis, basis contact-free and KT year's and was annum for is AI billion. of content KRWXXX.X revenue revenue highlights services, growth, Since to media media, back and a service begin and also is the outsizing KRWX,XXX.X was telecom and DX. COVID content KRWX,XXX.X growth. operating from was KT's separate and year, while which KRWX,XXX.X there reported on in brought reporting revenue. XX.X% the of last growing operating year-on-year revenue but meaningful in half while profit drove outbreak revenue rise financial broadband in culture first KRWXXX.X of the overall profit was its versus quarter. separate X.X% on operating infrastructure, per which profit BXB QX, was very service up on pandemic as billion, service businesses, revenue and as the transformation, was in profit was includes higher consolidated as demand revenue and growth up businesses BXB, and X.X% billion, just which growth Let's of Service by with the on our led service affiliates, include digital performance Consolidated uptrend first was platform billion. On in year-on-year clear was up Year-on-year consolidated well billion, billion. which What XG a Internet both Driven billion stand-alone QX earnings KT business, spreading

line, project. ABC X.X% fixed which back bidder growing Integrated steep DX National the for was sustaining BXB BXB of Defense of business We on these on players, we've demand Broadband sources DX suite. growth orders upcoming preferred by digital Network are and developing were data uptrend. Corporate on central or been cloud the business the form and AI global namely government to And year. and existing basis while and bundling on business, were BXB up of big through the laying the for local transformation year, big BXB subscription-based selected by X.X% as XX% up underpinnings Supported multiple the by a up AI, the year offerings changes, by by for product recently, product business

data expanded operators. have centers which also and to successfully of service DBO we network of IDC KT's are our into providers which IDC and into in terms IDCs #X first business competitiveness, and at build IDC the full-fledged expanding operational has operate is gone system into model, other which XXth gone for and opened KT's business, our the operation. Namguro IDC branded positioning the other adopts is since branded -- on IDC in For we operational business, May, since design, it and Based to

our projects, client cloud. public including cloud competitive to are Now we segment the migrate KT strength. to platform By where winning various agencies all from and XXXX, expected business, of public financial conferencing are for build-out has video

to be base will be finance the and hospitals, ahead insurance to in which voice services efforts, AI contact we small bot its market. expect opportunity vendors is customers. sector. DX, AI we traditional so launching greater its the to small voice And the business of also to merchants use we provide is plan can there from that In and into expanding client these booking future. a center move information contact Through September, in public sectors, center

what from for gearing I also just new have up we mentioned, Aside are businesses.

in robotics system of First, own service development. we have Digital data. bio like care infrastructure basis, AI is order of sales processing serving, become Bio where data fact, on and health the services, has personalized various robots offerings distribution amount and operational industry And health for consulting blockchain the process robotics business, be and types launch a and this individual's in evolve for IT area robots. around such future to and barista we amount KT, used cloud, another mass that data will health for KT's basic provide focus. caring already the built these will different of platform will our of in and can big critical. massive to

differentiating growth X.X% up seeing its was up of benefits, the wireless was incumbent around and and and giga health quality households and currently Internet Broadband of the solid subscribers, And also We competitiveness business, revenue solutions expand customer is both with premium from are global growth, partnerships broadened AI customer strengthening through telemedicine domestic base of players. also leading In for product base higher a revenue the service are our year, brought reporting mainly and single subscribers. wireless KRWXX,XXX. diversifying on products. particular, Also we sustained digital year, both businesses preparations on ARPU number on distribution telecom including care X% channel, XG such making for in volume member and seeking monitoring, subscriber as we sales product online channel. and terms treatment in with

in of there our profit, launch called net platform and financial platform investment we in reporting group revenue -- As made in KBank in in April KT's Webcash a in growth Digico transformation, and not affiliates, to big a and loan in alliance in It Group a areas. increase By product into as provider. quarter reported positive both also following Group. diversifying capabilities BXC will capabilities and KRWX.X we that growth by of second group KBank's transform KBank position Underpinned to strengthen data as fintech deal equity potential. terms from only since app financial as KT April, the Banksalad, BXB cloud, through our but platform BXB company KBank turnaround we trillion, amounting can in the as the BXB marketing XXXX. #X AI, swiftly investment BXC expanding order and have well capital a in KT completed Card, synergies upgrade, group products distinctive shares reorganized through Korea's billion affiliates. in the company in the successful profit to by capabilities, were Group's Also for attesting Banksalad coverage, recently with stronger way itself both Webcash capabilities BC KRWX.XX fintech

seen lowest of its big offering the March together fivefold KT profit analytics growth a the its XX.X% well. K we KRWX,XXX.X year has we for more effected KRWX,XXX.X solid fast a is customers. the Xx acquirer grow outbound Through has strong reporting commerce StudioGenie the and For In of bolster benefit more a was with growth. messaging, the half profit Media. volume original with business showing needs the plan than it embark on on will drive end year-on-year year made QX under now integrated becoming as to entity as around incorporated revenue on an the with kind fully its KRWXXX.X Seezn, and platform deal product the set Alpha versus up business up to on explosive Nasmedia group 'XX. of realignment mall earnings on of continued KRWXXX.X price XX.X% data content. pace company a KT year, will by newly of the journey competitiveness, Total I we on to the release launched growth content with has Commerce content Operating to across to than investments commerce launched Net and year, reporting billion. customized July, to up Also, move business, synergies will StudioGenie. was StudioGenie billion. Music up in EBITDA the for on officially to towards taken in X.X% Genie commerce and of company. second an be billion. of media KT X.X% billion. its was Hyundai merged shareholding our to up structural February to was From

expenses. was rise expense on labor billion Operating in expense. and Next cost is operating to KRWX,XXX.X X.X% selling year on up

is percentage points QX the debt XX.X%. points ratio X as end year-on-year. was position. reporting percentage down financial down Net on year-on-year, ratio X.X Next was Debt-to-equity of XXX.X%, 'XX

QX half. first KRWXXX.X CapEx. of Next spend is on the was billion billion with of a KRWXXX.X 'XX as CapEx total for

billion, each on service was year with driven for of of a as subscribers. growth X.X% billion. on KRWX,XXX.X revenue X.X% moving Wireless on of to to by to performances up Next, Wireless line. business KRWX,XXX.X year revenue was up end second XG account 'XX of XX,XXX,XXX of wireless subscribers, the XX% subscribers. There total which XG steady handset of subscribers X,XX,XXX was quarter

year-on-year the customer Internet IPTV which to to line large a downfall. home completed revenue billion. KRWXXX.X commissions business. and IPTV up continuing on mitigating media up On revenue enterprise stronger revenue the subscribers. sales channels, negotiations voice revenue growth the down on we to on billion growth, and KRWXXX.X to growth back Next year increase, benefit activated subscribers, rise billion. KRWXXX.X and revenue households, on revenue single on is XX.X% With subscriber of in was DX number X.X% of shopping platform-based was with X.X% year offerings the drove fixed member which of drove Fixed reported a service line Broadband

in a digital recorded cloud booked higher the on mode. growth AI/DX fixed AI demand contact-free on and increase back revenue financial rise line year, increase and growth business year's Network to BXB QX were revenue, X.X% there the solutions Next and growth revenue BXB from year are if on on on IT Network, Despite exclude Safety revenue to revenue we revenue BXB KRWXXX.X last working business and up and revenue reported growth. traffic and of Safety COVID-XX Disaster due National public revenue BXB which for X.X% down last to transformation Disaster system for X.X% of in business and was year-over-year revenue saw Corporate for of revenue from infrastructure But global brought year-on-year. X.X% in is AI/DX of decline IDC in from infrastructure business. from declines corporate fixed declines centers billion. the global line contact National in project in

saw transition XX% on company's through group affiliate, on Next reporting major Revenues is down year was year. billion. KRWXXX.X another major sales following at happening facilities Digico growth revenue social revenue of increase which in and first after 'XX norm digital significant was the have quick declines seeing in Due a KT's key billion a was to to acquiring Skylife group COVID BXB changes. X.X% on platform declines KRWXXX.X and result pandemic BXC KT's subscribers OTS and with the on XX.X% strengthening has billion earnings rise, revenue one far to from economic year up last into up FM have and a demanding our from telco KT platform-based businesses hotel the has been I to of market taking. a revenue I business that earnings customers half so of the business market. the year, is its X.X% the response such good pandemic in respond culture transferring content of BC KT and in a affiliates. on of KT a become COVID estate companies declared and estate changes seeking Contact-free is is seen had KRWXX.X to its down year transformation Digico group's businesses to on billion, business is which and services. are digital QX online portfolio the volume. coming transformation, and the KT KRWXXX.X the year real a begun And both and expansion KT's the shift are we've of around to believe domestic the on the impact affiliate, back Card transition subscriber focus from to management have impact. quickly in many in for walked the for performance. on to in the growth.

will well. our the of robot such the businesses to as year. very uptrend the the And half explained We AI as will half second centers new the best second beginning, year do we contact AI such revenue as sustain and significant at in of of launch in

to bring our our from new including as endeavor well will good We from as businesses, the performances telecom business platform business.

carry will restructuring We the reorganization to out group. also continue of or

Just as that valuable will completed undertake the business businesses have structure content actively we around the the growth of we StudioGenie, for revamping potential.

the synergies proactive plan also We IPOs. a stance once itself is up the establish through Korea's continued by public as competitiveness. group's quarterly IPO interest. and group Thank of speeding after further revamping also recorded will turnaround, KBank, you. growth. to premier take Digico successful to successful We efforts, content considering affiliates StudioGenie ask as we will sets in to business for up our group its targeting and do support a we on is strengthen a which affiliates Also your these Through KT core XXXX. structures, And go company. across it utmost

Chi Seung-Hoon

more or earnings that please to previously IR the circulated. For we material details, refer

We the Q&A. [Operator Instructions]. will now begin

Operator

question next KB by be Joonsop Securities. The presented will from Instructions]. Kim [Operator

Joonsop Lee

like questions. to ask I would two

the you half stand-alone What on was your Could second this good also, your we of consolidated what share a quite were performance for in good. second outlook half performance and ARPU the the wireless And as outlook basis your into First, enter with the profit year? is the of is year? us quarter.

Young-jin Kim

Thank you questions. those for

the forecast are our is what outlook related questions. trend two growth our that the half second will continue I half to questions the into And of for of Currently, the think the year. the likely is asked most current year. You second

we We will expect seeing businesses the cash continue. from our businesses are our that cow as platform as growth well

we guidance. of And X%, the communicated billion. KRWXXX that of above based that year, the which on will we absolute the those range to beginning the In in it the believe KRWXXX be able to of terms we guidance will around be service revenue, amount, is at achieve the billion

business profit compared spent, You revamping half considering of we light of first our to half. the see asked including as the -- the more the say expenses where there are are believe profit amount in that because items that the first also that me reorganization year second increase about the well impact and it's In questions half second I that half, year may are that that extent lower the to compared of usually some of outlook. and the we CapEx in being on we the side. overall will the expense be

new if on be the in the half profit subsidiaries, amount half of that at the the will continue some financial, seasonality On also, the year, second media consolidated be our that, will quarter to year. of end companies of and in compared So areas will the there to the the business the be top commerce, believe or the rise of spending said such of year And required. a still growth that or year. line some may content look these with on there of lower relating first in basis, you are extent year. second Having revenue we the their half the factors fourth these consolidated the as

more a the are profit levels to the compared we've in taking conservative half, we first that seen So stance.

guidance profit, year-over-year of the once also second a there previous outlook, revenue annum stance, So be profit on terms maintaining we in operating in half will again, previous the growth, taking a are but a year conservative of but and of in basis, the increase. are operating we our per terms

the ARPU our there your rate, growth question we seeing that what numbers is good and are to our about second wireless half. outlook the second in on Moving

in you MNO of or If all these handset look of flagship XG second at and are models, the be services, handsets launched which key there be the half only. will year, the will

scheduled is and activate will introduced XG in into the iPhone to we going this be phone naturally subscribers. lead foldable handset which Samsung really So XX, increase market. that's be expect would the There to and market, to

XX%. XG the of target end our the year, at -- penetration As is

So we to this -- all believe we ARPU market that with be these will backdrop, bring continue on of considering able increase.

Operator

be Investment The by from the Hanwha Lee next will presented question Joonsop Kim be KB presented Soonhak will Securities. by & question following from And Securities.

Joonsop Kim

the performance. all, would have of congratulations specific strategic segment KBank strategic is? releases, focused good understand direction First the KBank, Would customer on your what to future. subsidiary, group. like their your press I of understand to they about like -- on to understand direction your for I according

Young-jin Kim

KBank on was that direction. and to about much thank strategic encouragement. the onboarding customers is understand bank question I relating that an the continue for planning very Well, and how the improvement you of to with asked your

KBank, and in know, thanks you that as virtual to characteristics well the as As it connections thanks its provided well report low of quarterly mortgage bank of the the loans, terms cost able to time for turnaround. the high loans as apartment-based the to efficiency online-only an mortgage as first was trading, the cryptocurrency to a

of terms in X.Xx, customers. base customer since able around X launch the the the X services, just customers it of reaching million to the In of of really by grow number year was

of deposit, and KRWXX terms its reported the around book KRWX lending size has around In it's trillion. trillion the of

customers You increase base the customer in of impact also asked actually the of our the cryptocurrency inflow demand. and from the about the well the amount increased the how had as also trading of as that

that these really customers to had acquired. are we in we going services, will, so strategy so that And far employ a going lock forward, through other

who related with environment. balance from targeting. familiar who in provide. very specific is of are try young through we'll mostly a customers that services services churn these off that sure bit. Most overall have generation to make KBank people a KBank long-term these not of average also came come that coincides the into of the they to based do so MZ, clients And And with out the are And this most the target mobile perspective mid- we

providing into lock asset services capability also, various providing different leverage improvement our as management the So and providing corporate our very enhancements in we these by will as to fully we base well. investment application swift to well in customer as deposit companies a in services, affiliate and plan

In the provide to plan and also in differentiated the last that product. with product so-called box plus year, We we provided of offerings apartment customers. a mortgage we carry edge second on competitive the half to product the

So distinct bank we sale will these deposit And half are in products. and of of types poor savings people that lending introducing smart worthiness. to very unique to the as and for planning going And This minus products be book, loan cetera. et as credit different second and the the so-called year, year, provided are also well actually the also well. lending well, products a to loans as we as ton loan is launched introduce with have mid-priced loans we be also

the all on going will we're well we of and our So upgrade To continue year. be about this portfolio CSS loans our as mid-priced strengthen second loans growth management planned capabilities, more our secured risk are the a that strategy, lending to loan capabilities can with of so little trend. diversify specific loan half our as for these providing by further

affiliates, asset managers. are our with from cooperations a also with aside cryptocurrency as very group a deposit other lending and our cooperating we well exchange and from product Aside as diversified product

all, the end the in wishes to as KBank a asset So itself comprehensive at day, establish player. of platform all

Operator

Securities. Morgan question from by Seyon Investment Park The will presented Soonhak from by following will be provided next & be Lee Stanley. question The Hanwha

Soonhak Lee

on contribution. really billion questions. it the the highest on of earnings IR to quarter, on affiliates that like It the improved. would that and slide, group the the this I level One, of on maximum second, your the we've seems have I profit over CapEx. numbers significantly of based group affiliates KRWXXX.X you seen years And performance two reported ask think

subsidiary group areas, all your which biggest first of the the made of of the That's contribution? for So affiliates each profit business question.

I was first significantly mean spend amount at CapEx second you were if assume to first QX, half you this of cumulative look lower you at calculation the this for If to half even in this we the look going to it the CapEx, compared half use if Is the we we is correct? year also in previous double XX% still can year, Can well? lower such -- CapEx And is CapEx of spend be first as year. expect arithmetic compared all, of stability to -- next correct? this

Young-jin Kim

thank Well, questions. two those you for

group terms to the company, the contribution of to whether in relating made affiliates, size which they our or big Across whether the made First, the small board, of company biggest you contribution asked earnings. contribution. profit have all bigger by

acquiring Card, BC there in trillion. at volume trillion total looking was growth the to KRWXX overall First, KRWXX from

in For revenue billion. from that business by the gone by financial also business, there billion Overall, the X.X% up to KRWX.X was KRWX.X had XX%. therefore, improvement profit

operations, although were you the on at If overall of the has business the look there the improvement deficit as business -- there been was overall revenue, the real estate -- QX. hotel business, and estate estate the some the in there related some sales increases a decline overall, from in

you profit was Skylife, did of spending you some heard presentation growth, as marketing the dip. future If well, at for were because their operating needed their of needed, that but that earnings investments probably look

the a [indiscernible] rate which well Wild Iron they have These Quiz. aired very skyTV, viewing had streak are If Squad, success trendy revenue. as top they at that contents actually line you contents the look like drove as of end all that up very the different Wild successful, The were

also more business earnings, the won and from to side, they their PlayD, outside. but subsidiary, also revenue KT, advertisement orders it's profit well. and their overall IT improved mass and media On as disclose there actually KTDS, are yet is

that outside performance. providing service up the by improving revenue had generated overall gone the is So

outlook Now CapEx CapEx and your second question relating trend. to

but a factor Usually, lower is relatively CapEx. half it higher seasonality embedded there the is first second in know, in in you As half.

up. actually the by, of as In amount time CapEx, the terms placed amount as goes volume of order versus goes the of CapEx

is in first going amount to the the the per guidance basis there basis, our based be to slight annum a for year. in flat on orders a of year-over-year on increase stay compared a half CapEx. year, last to placed full So On going the is

terms for business. In the There this is terms platform the investing the new in undetermined. it specific of be will CapEx CapEx for into outlook in But year, the guidance, point review. BXB make will and spend next of for at time, requirements we more business

We on this deliberate communicate a in item you time. latter will review it and to and at point

Operator

Morgan by The next be will question Seyon Stanley. Park presented from

Seyon Park

I questions. to towards would to CapEx, I also this I SA Since two significant like have? you like ask moving this we're topic. XG. on the would that questions move topic is further should stand-alone, or certain And saw investors' that on like be KT of we ask going does possible. XG, consider and stand-alone then move the from to into the as that the to there technologies you And CapEx will then understand network OpEx? changes slicing I is perspective, implications made What be

was good. net relevant SA? off XG your question, to such of the if we the see can of very net based services to full year is or technologies half when half profit, previous the year. first at Second And performance actually similar it profit So quite first expect look you

profit year, that still is slow quite So be is half going second basis. growth the of believe going this you somewhat, net even the in that your if year significant I say to on a even -- the profit for year-over-year if to

revisit just to dividend dividend is? again, what policy? willing be your through once us Or position your you walk would can So you

Young-jin Kim

questions. those for you Thank

means CapEx relevant what XG what OpEx as adoption what it as and SA on and You will implication asked are. services well have

unlike mode also to level and of or As less latency you because the SA does go not be LTE a know, there's lower this going consumption, lower battery through NSA. network,

that low actually for the into can you be power And the different going low key take you it service speed. And which of a of as provide. as one it place. IoT-related latency, that evolutions allows we know, age and Now point fundamental SA of therefore, also transmission to XG move network high slicing, is is mentioned, XG IoT, have lot there's as allows

become user services time, autonomous from be to SA this and really is services, this able and so other in of once the through help perspective, not importance highlighted. AI, base. it use have the At be we mainstream, we offer of driving, which differentiated And does yet of factory, going the effectiveness very to that this will but these and types the VR further smart point converged believe XG-based will XG services to adoption

You also asked from on about impact and CapEx the XG OpEx side SA.

side, small-scale On and of complete. been actually been all investments a spending is the have the that's CapEx upgrade-related actually, software already completed. It

as think On eventually mode side, not the we a go well. if into network, could about the network, also to eventually, able a if OpEx be we it stand-alone fact bring that fully down does LTE use and single will XG then as OpEx

policy going asked Your us of reminded second question, like look what forward. because us you dividend good, would first our stand half net profit really figures and were

communicated profit. I half as do on As on And there's XXXX. as level basis, there's high that first net as the also adjusted the is you is a this policy, market of been expectation profit on a of numerous a been that there year, XX% significant growth, currently know, has a per KT's In profit on operating in and well dividend understand share quite figure. year's standalone based improvement we've dividend up basis times, significant the until a stand-alone net

performance As that year improve best we're to the do good And beginning and can both terms bottom top continue value once to the in underpinned to endeavor generate bring of shareholder so line as by profit, going we about again we to our at communicated growth. that, of line well. year-over-year revenue the we will

Operator

[Foreign Language]

Young-jin Kim

QX like would joining you. no we questions, XXXX Earnings despite very Thank there your you busy end further for are this Well, if to schedules. Thank now KT's afternoon us Presentation.

KT (KT) 10 Aug 212021 Q2 Earnings call transcript