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 October 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: October 31, 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

October 31, 2008

LOGO

3rd 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 third 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 third quarter will be filed with the Financial Supervisory Service(FSS) and the Korea Exchange(KRX) on November 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
3Q		     2008
2Q		     QoQ     2007
3Q		     YoY     2008
Cumm.		  
(KRW bn)        Amount     D%       Amount     D%    

OPERATING REVENUES

    2,913.5     3,029.0     -115.6     -3.8 %   2,958.3     -44.8     -1.5 %   8,909.5  

¨ Internet access

    534.1     539.8     -5.7     -1.1 %   529.5     4.6     0.9 %   1,602.0  

¨ Internet application

    156.5     148.2     8.4     5.7 %   105.6     51.0     48.3 %   411.6  

¨ Data

    419.8     413.0     6.8     1.7 %   404.9     14.9     3.7 %   1,235.2  

¨ Telephone

    970.2     1,016.3     -46.0     -4.5 %   1,026.5     -56.3     -5.5 %   3,009.6  

¨ LM

    340.6     358.5     -17.9     -5.0 %   387.8     -47.2     -12.2 %   1,063.3  

¨ Wireless

    364.6     428.8     -64.2     -15.0 %   363.5     1.1     0.3 %   1,213.3  

¨ Real estate

    63.4     60.5     2.9     4.8 %   63.5     -0.1     -0.2 %   182.7  

¨ Others

    64.2     64.0     0.1     0.2 %   77.0     -12.8     -16.6 %   191.8  

¡ SI

    57.7     57.9     -0.2     -0.4 %   70.4     -12.7     -18.1 %   171.1  

OPERATING EXPENSES

    2,584.0     2,661.4     -77.4     -2.9 %   2,620.6     -36.6     -1.4 %   7,879.4  

¨ Labor

    600.7     627.4     -26.7     -4.3 %   706.3     -105.6     -14.9 %   1,911.5  

¨ Commissions

    182.4     173.0     9.4     5.4 %   168.4     14.0     8.3 %   526.3  

¨ Sales commission

    174.6     228.8     -54.2     -23.7 %   157.7     16.9     10.7 %   633.5  

¨ Sales promotion

    64.9     69.0     -4.1     -5.9 %   45.2     19.7     43.6 %   213.1  

¨ Advertising

    17.2     32.3     -15.1     -46.8 %   26.6     -9.5     -35.6 %   66.4  

¨ Provision for doubtful accounts

    22.7     49.4     -26.7     -54.0 %   -19.8     42.5     N/A     78.9  

¨ Depreciation

    560.2     493.8     66.4     13.4 %   541.8     18.5     3.4 %   1,536.4  

¨ Repairs & maintenance

    26.6     32.1     -5.5     -17.1 %   64.1     -37.5     -58.5 %   80.7  

¨ Cost of goods sold

    117.7     180.8     -63.1     -34.9 %   124.3     -6.6     -5.3 %   455.8  

¨ Cost of service provided

    489.8     481.0     8.8     1.8 %   503.7     -13.9     -2.8 %   1,447.6  

¨ R&D

    59.4     57.2     2.3     3.9 %   63.0     -3.5     -5.6 %   173.4  

¨ Activation/installation and A/S cost

    98.7     92.1     6.6     7.1 %   69.3     29.5     42.5 %   287.4  

¨ Others

    169.1     144.5     24.6     17.0 %   170.0     -0.9     -0.5 %   468.5  

OPERATING INCOME

    329.4     367.6     -38.2     -10.4 %   337.7     -8.3     -2.5 %   1,030.1  

Operating margin

    11.3 %   12.1 %   -0.8 % P     11.4 %   -0.1 % P     11.6 %

EBITDA(1)

    889.7     861.5     28.2     3.3 %   879.5     10.2     1.2 %   2,566.5  

EBITDA margin

    30.5 %   28.4 %   2.1 % P     29.7 %   0.8 % P     28.8 %

Non-operating income

    295.3     133.8     161.6     120.8 %   109.2     186.2     170.5 %   563.4  

Non-operating expenses

    425.8     307.9     117.9     38.3 %   132.5     293.3     221.3 %   1,003.4  

INCOME BEFORE INCOME TAXES

    198.9     193.5     5.4     2.8 %   314.3     -115.4     -36.7 %   590.1  

Income tax expenses

    37.5     32.9     4.6     13.9 %   57.0     -19.5     -34.2 %   114.1  

Effective tax rate

    18.9 %   17.0 %   1.8 % P     18.1 %   0.7 % P     19.3 %

NET INCOME

    161.4     160.5     0.9     0.5 %   257.4     -96.0     -37.3 %   476.0  

EPS(2) (units: won)

    799     788     11     1.4 %   1,263     -464     -36.7 %   2,343  

 

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

¡ Revenue

- QoQ decrease due to fall in telephone and wireless revenue.

- YoY decrease due to fall in telephone and LM revenue.

¡ Operating Income

- YoY and QoQ decrease due to fall in revenue and rise in depreciation cost.

¡ For comparison purposes, net income as of September 30, 2007 has been revised in compliance with Article 15(Equity Method) of the Korean Accounting Standards, which was amended on February 22, 2008.

(252.7 bn g 257.4bn)

- Cancellation of previously amortized amount : Retained earnings which was previously declined from amortization of goodwill was offset and raised due to cancellation of the amortized amount.

 

 

3

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B. Summary of Balance Sheet

 

(KRW bn)    2008
3Q		     2008
2Q		     QoQ     2007
3Q		     YoY  
       Amount     D%       Amount     D%  

TOTAL ASSETS

    18,478.1     17,801.3     676.8     3.8 %   17,942.9     535.2     3.0 %

¨ Current assets

    3,616.1     3,084.1     532.0     17.3 %   3,559.5     56.6     1.6 %

¡ Quick assets

    3,468.1     2,964.0     504.1     17.0 %   3,462.9     5.2     0.2 %

- Cash & Cash equivalents

    1,362.0     829.5     532.5     64.2 %   1,220.3     141.7     11.6 %

¡ Inventories

    148.0     120.1     27.9     23.2 %   96.7     51.4     53.1 %

¨ Non-current assets

    14,862.0     14,717.2     144.8     1.0 %   14,383.4     478.6     3.3 %

¡ Investments and other non-current assets

    4,036.7     3,823.5     213.2     5.6 %   3,726.6     310.1     8.3 %

- KTF shares

    2,544.9     2,531.2     13.6     0.5 %   2,673.5     -128.7     -4.8 %

- Long-term loans

    20.7     23.0     -2.3     -10.0 %   94.7     -74.0     -78.1 %

- Others

    1,471.1     1,269.3     201.9     15.9 %   958.4     512.7     53.5 %

¡ Tangible assets

    10,450.7     10,501.9     -51.2     -0.5 %   10,237.1     213.6     2.1 %

¡ Intangible assets

    374.5     391.7     -17.2     -4.4 %   419.6     -45.1     -10.8 %

TOTAL LIABILITIES

    9,583.7     9,025.9     557.9     6.2 %   9,045.3     538.4     6.0 %

¨ Current liabilities

    2,648.9     2,399.7     249.2     10.4 %   2,984.9     -336.0     -11.3 %

¡ Interest-bearing debts

   411.8     13.5     398.4     2957.1 %   590.2     -178.4     -30.2 %

¡ Accounts payable

    658.0     758.6     -100.6     -13.3 %   643.7     14.3     2.2 %

¡ Others

    1,579.1     1,627.7     -48.6     -3.0 %   1,751.0     -171.9     -9.8 %

¨ Non-current liabilities

    6,934.8     6,626.1     308.7     4.7 %   6,060.4     874.4     14.4 %

¡ Interest-bearing debts

   5,491.8     5,196.7     295.1     5.7 %   4,620.8     871.0     18.8 %

¡ Installation deposit

    808.8     813.3     -4.5     -0.6 %   858.1     -49.4     -5.8 %

¡ Others

    634.3     616.1     18.2     2.9 %   581.5     52.8     9.1 %

TOTAL STOCKHOLDERS’ EQUITY

    8,894.4     8,775.4     118.9     1.4 %   8,897.6     -3.2     0.0 %

¨ Common stock

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

¨ Capital surplus

    1,257.3     1,258.5     -1.3     -0.1 %   1,440.8     -183.5     -12.7 %

¨ Retained earnings

    9,840.3     9,752.7     87.6     0.9 %   9,699.0     141.3     1.5 %

¨ Capital adjustments

    -3,815.1     -3,828.0     12.9     N/A     -3,816.0     1.0     N/A  

¡ Treasury stock

    -3,824.9     -3,837.4     12.6     N/A     -3,825.7     0.8     N/A  

¡ Gain(loss) on valuation of investment securities

    9.8     11.2     -1.4     -12.1 %   12.9     -3.1     -23.8 %

¡ Others

    0.0     -1.7     1.7     N/A     -3.3     3.2     N/A  

¨ Others

    50.9     31.2     19.7     63.2 %   12.9     38.0     295.4 %

Total interest-bearing debt

    5,903.6     5,210.2     693.4     13.3 %   5,211.0     692.6     13.3 %

Net debt

    4,541.6     4,380.7     160.9     3.7 %   3,990.7     550.9     13.8 %

Net debt / Total shareholders’ equity

    51.1 %   49.9 %   1.1 % P     44.9 %   6.2 % P  

¡ Assets

- Increase in cash and cash equivalents due to issuance of debt.

¡ Liabilities

- YoY and QoQ increase of non-current liabilities due to issuance of debt.

¡ Stockholders’ Equity

- Retained earnings was initially decreased by retirement of treasury shares(KRW73.8bn). However, KRW161.4 billion increase in net income led to a QoQ net increase of KRW87.6 billion in retained earnings.

 

 

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2. Operating Results

A. Internet Revenue

 

(KRW bn)    2008    2008    QoQ     2007    YoY     2008
   3Q    2Q    Amount    D%     3Q    Amount    D%     Cumm.

Internet access

    534.1    539.8    -5.7    -1.1 %   529.5    4.6    0.9 %   1,602.0

¨ Broadband

    532.6    539.3    -6.6    -1.2 %   529.1    3.6    0.7 %   1,599.4

¡ Megapass

    509.5    508.4    1.1    0.2 %   506.8    2.7    0.5 %   1,519.0

¡ Nespot

    7.3    8.0    -0.6    -7.7 %   9.4    -2.1    -22.3 %   23.8

¡ WiBro

    15.8    22.9    -7.1    -31.1 %   12.8    3.0    23.3 %   56.6

¨ Others

    1.4    0.5    0.9    174.6 %   0.4    1.0    231.2 %   2.6

Internet application

    156.5    148.2    8.4    5.7 %   105.6    51.0    48.3 %   411.6

¨ IDC

    71.1    70.6    0.5    0.7 %   53.7    17.4    32.4 %   190.5

¨ Bizmeka

    51.8    47.4    4.5    9.5 %   33.5    18.4    54.9 %   135.9

¨ MegaTV

    14.3    9.6    4.7    48.9 %   1.3    13.0    1027.7 %   29.0

¨ Others

    19.3    20.6    -1.3    -6.4 %   17.2    2.1    12.5 %   56.2

¡ Internet Access

- QoQ decline in revenue due to decrease in handset sales from fall in new WiBro subscribers.

¡ Internet application

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

B. Data Revenue

 

(KRW bn)    2008
3Q		    2008
2Q		    QoQ     2007
3Q		    YoY     2008
Cumm.
         Amount    D%        Amount    D%    

Data

    419.8    413.0    6.8    1.7 %   404.9    14.9    3.7 %   1,235.2

¨ Leased line

    280.0    269.9    10.1    3.7 %   274.3    5.7    2.1 %   818.2

¡ Local

    115.4    115.6    -0.2    -0.2 %   115.4    0.0    0.0 %   347.9

¡ Domestic long distance

   83.5    81.2    2.3    2.8 %   84.4    -0.9    -1.1 %   244.8

¡ International long distance

    7.3    6.3    1.1    16.8 %   4.4    2.9    65.7 %   18.6

¡ Broadcasting & others

    73.8    66.9    6.9    10.3 %   70.1    3.6    5.2 %   206.9

¨ Data leased line

    40.3    39.2    1.1    2.8 %   35.3    4.9    13.9 %   117.2

¡ Packet data

    1.3    1.5    -0.3    -17.1 %   2.1    -0.8    -37.9 %   4.4

¡ National network ATM

    21.7    21.3    0.4    2.0 %   19.9    1.8    9.0 %   63.6

¡ VPN

    17.3    16.4    0.9    5.7 %   13.4    3.9    29.3 %   49.1

¨ Kornet

    65.2    67.8    -2.6    -3.9 %   63.4    1.8    2.8 %   195.9

¨ Satellite

    26.6    27.7    -1.1    -4.0 %   25.0    1.7    6.6 %   80.3

¨ Others

    7.7    8.3    -0.5    -6.5 %   6.9    0.8    11.7 %   23.5

 

 

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C. Telephone Revenue

 

(KRW bn)    2008
3Q		    2008
2Q		    QoQ     2007
3Q		    YoY     2008
Cumm.
         Amount    D%        Amount    D%    

Telephone revenue

    970.2    1,016.3    -46.0    -4.5 %   1,026.5    -56.3    -5.5 %   3,009.6

¨ Subscriber connection

    329.1    335.3    -6.2    -1.9 %   345.0    -15.9    -4.6 %   1004.7

¡ Subscription fee

    5.1    7.9    -2.8    -35.2 %   10.2    -5.1    -49.7 %   22.3

¡ Basic monthly fee

    264.9    267.5    -2.6    -1.0 %   274.1    -9.2    -3.4 %   802.4

¡ Installlation

    5.7    6.5    -0.8    -12.9 %   7.5    -1.8    -23.5 %   20.1

¡ Interconnection

    53.4    53.3    0.1    0.1 %   53.3    0.1    0.3 %   159.9

¨ Local

    212.1    217.9    -5.7    -2.6 %   228.1    -16.0    -7.0 %   654.2

¡ Usage

    133.1    139.2    -6.1    -4.4 %   151.5    -18.4    -12.2 %   419.8

¡ Interconnection

    25.0    25.4    -0.4    -1.7 %   24.0    1.0    4.2 %   74.2

¡ Others

    54.1    53.3    0.8    1.5 %   52.6    1.5    2.8 %   160.1

¨ Domestic long distance

    136.7    140.2    -3.5    -2.5 %   158.7    -22.0    -13.9 %   429.1

¡ Usage

    128.5    132.9    -4.4    -3.3 %   149.7    -21.2    -14.2 %   404.2

¡ Interconnection

    7.9    7.0    0.8    12.1 %   8.8    -0.9    -10.1 %   23.9

¡ Others

    0.3    0.3    0.0    1.2 %   0.3    0.1    34.3 %   1.0

¨ International long distance

    43.7    49.1    -5.4    -11.1 %   48.7    -5.0    -10.2 %   139.8

¨ International settlement

    42.9    47.6    -4.7    -9.8 %   35.3    7.6    21.6 %   140.1

¨ SoIP

    19.6    21.5    -1.8    -8.6 %   7.6    12.0    158.5 %   51.3

¨ VAS

    89.2    83.0    6.2    7.4 %   94.5    -5.3    -5.6 %   265.5

¨ Public telephone

    11.9    10.3    1.6    15.8 %   14.7    -2.9    -19.4 %   32.8

¨ 114 phone directory service

    29.7    28.0    1.8    6.3 %   30.2    -0.5    -1.5 %   89.7

¨ Others

    55.3    83.5    -28.2    -33.7 %   63.8    -8.4    -13.2 %   202.4

¡ Local, DLD

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

¡ SoIP

- QoQ decline in SoIP revenue due to decrease in SoIP handset sales caused by fall in new SoIP subscribers.

¡ Others

- QoQ decrease in revenue was due to a temporary increase in demand of international ISDN in prior quarter.

 

 

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D. LM (Land to Mobile) Interconnection Revenue

 

(KRW bn)    2008
3Q		    2008
2Q		    QoQ     2007
3Q		    YoY     2008
Cumm.
         Amount    D%        Amount    D%    

LM Revenue

    340.6    358.5    -17.9    -5.0 %   387.8    -47.2    -12.2 %   1,063.3

LM interconnection cost

    183.9    176.8    7.2    4.1 %   195.7    -11.7    -6.0 %   545.2

¡ 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

 

(KRW bn)    2008
3Q		    2008
2Q		    QoQ     2007
3Q		    YoY     2008
Cumm.
         Amount    D%        Amount    D%    

Wireless revenue

    364.6    428.8    -64.2    -15.0 %   363.5    1.1    0.3 %   1,213.3

¨ Wireless resale

    361.6    426.9    -65.3    -15.3 %   358.1    3.5    1.0 %   1,206.7

¡Service revenue

    247.7    258.8    -11.0    -4.3 %   251.0    -3.2    -1.3 %   761.6

¡ Handset sales

    113.8    168.1    -54.2    -32.3 %   107.1    6.7    6.3 %   445.1

¨ Others

    3.0    2.0    1.1    54.2 %   5.4    -2.4    -43.8 %   6.6

¡ Wireless revenue

- Fall in the number of new subscribers and total subscribers led to a QoQ decrease in revenue.

 

 

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F. Operating Expenses

 

(KRW bn)    2008
3Q		    2008
2Q		    QoQ     2007
3Q		    YoY     2008
Cumm.
         Amount    D%        Amount    D%    

Labor

    600.7    627.4    -26.7    -4.3 %   706.3    -105.6    -14.9 %   1,911.5

¨ Salaries & wages

    437.9    450.6    -12.7    -2.8 %   506.5    -68.6    -13.5 %   1,365.3

¨ Employee benefits

    113.1    119.6    -6.5    -5.4 %   110.2    3.0    2.7 %   341.2

¨ Provision for retirement

    49.8    57.3    -7.5    -13.1 %   89.7    -39.9    -44.5 %   205.0

Commissions

    182.4    173.0    9.4    5.4 %   168.4    14.0    8.3 %   526.3

Marketing expenses

    256.6    330.0    -73.4    -22.2 %   229.6    27.1    11.8 %   913.0

¨ Sales commission

    174.6    228.8    -54.2    -23.7 %   157.7    16.9    10.7 %   633.5

¨ Sales promotion

    64.9    69.0    -4.1    -5.9 %   45.2    19.7    43.6 %   213.1

¨ Advertising

    17.2    32.3    -15.1    -46.8 %   26.6    -9.5    -35.6 %   66.4

Provision for doubtful accounts

    22.7    49.4    -26.7    -54.0 %   -19.8    42.5    N/A     78.9

Depreciation

    560.2    493.8    66.4    13.4 %   541.8    18.5    3.4 %   1,536.4

Repairs and Maintenance

    26.6    32.1    -5.5    -17.1 %   64.1    -37.5    -58.5 %   80.7

Cost of goods sold

    117.7    180.8    -63.1    -34.9 %   124.3    -6.6    -5.3 %   455.8

¨ PCS handset cost

    113.7    161.9    -48.3    -29.8 %   109.6    4.1    3.7 %   436.2

¨ Others

    4.0    18.9    -14.9    -78.7 %   14.7    -10.7    -72.6 %   19.6

Cost of service provided

    489.8    481.0    8.8    1.8 %   503.7    -13.9    -2.8 %   1,447.6

¨ Cost of service

    238.4    235.6    2.8    1.2 %   247.9    -9.5    -3.8 %   700.5

¡ PCS resale network cost to KTF

    126.1    134.6    -8.5    -6.3 %   126.2    -0.1    -0.1 %   389.5

¡ SI service cost

    55.7    52.9    2.7    5.1 %   66.5    -10.8    -16.2 %   162.5

¡ Others

    56.6    48.0    8.6    17.9 %   55.2    1.4    2.6 %   148.4

¨ International settlement cost

    54.7    59.3    -4.6    -7.8 %   53.6    1.1    2.1 %   173.3

¨ LM interconnection cost

    183.9    176.8    7.2    4.1 %   195.7    -11.7    -6.0 %   545.2

¨ Others

    12.8    9.3    3.5    37.0 %   6.6    6.2    93.3 %   28.7

R&D

    59.4    57.2    2.3    3.9 %   63.0    -3.5    -5.6 %   173.4

Activation/installation and A/S cost

    98.7    92.1    6.6    7.1 %   69.3    29.5    42.5 %   287.4

Others

    169.1    144.5    24.6    17.0 %   170.0    -0.9    -0.5 %   468.5

CAPEX*

    511.1    653.0    -141.9    -21.7 %   535.4    -24.3    -4.5 %   1,559.4

 

* 2008.2Q CAPEX was settled as 653.0 billion Won (previously disclosed as 624.6bn Won)

¡ Labor

- Fall in number of employees led to a decrease in salary and incentives, resulting in a QoQ decline in labor cost.

- YoY decline in labor cost from recognition of salary raise for 2007 in 3Q07, resulting in a temporary rise in labor cost.

¡ Marketing expenses

- QoQ decrease due to Megapass marketing ban and fall in new wireless resale subscribers.

¡ Provision for doubtful accounts

- Temporary disposal of bad debt in prior quarter led to a QoQ decrease in provision for doubtful accounts.

¡ Depreciation

- Rise in YoY and QoQ due to increase in purchase of new equipment.

¡ COGS

- Decrease in YoY and QoQ due to reduced number of new wireless resale subscribers.

 

 

8

LOGO

 

 

G. Non-operating Income

 

(KRW bn)    2008
3Q		    2008
2Q		    QoQ     2007
3Q		    YoY     2008
Cumm.
         Amount    D%        Amount    D%    

Non-operating income

    295.3    133.8    161.6    120.8 %   109.2    186.2    170.5 %   563.4

¨ 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

    1.0    1.6    -0.5    -34.7 %   0.9    0.1    10.7 %   3.0

¨ Interest income

    22.3    25.8    -3.4    -13.3 %   24.3    -2.0    -8.1 %   66.3

¨ FX transaction gain

    16.1    5.2    10.9    208.4 %   1.0    15.1    1520.4 %   27.7

¨ FX translation gain

    14.6    6.5    8.0    122.7 %   10.5    4.1    39.4 %   32.1

¨ Gain on equity method

    15.4    30.6    -15.1    -49.5 %   20.3    -4.9    -24.0 %   65.1

¨ Others

    225.9    64.1    161.8    252.4 %   52.2    173.7    332.8 %   369.3

¡ Others

- QoQ and YoY increase mainly from KRW207.1 billion gain on valuation of derivatives.

H. Non-operating Expenses

 

(KRW bn)    2008
3Q		    2008
2Q		    QoQ     2007
3Q		    YoY     2008
Cumm.
         Amount    D%        Amount    D%    

Non-operating expenses

    425.8    307.9    117.9    38.3 %   132.5    293.3    221.3 %   1,003.4

¨ Interest expense

    78.8    85.8    -7.0    -8.1 %   77.3    1.6    2.0 %   237.2

¨ FX transaction loss

    10.4    5.4    5.0    93.6 %   1.1    9.4    889.6 %   17.8

¨ FX translation loss

    290.1    88.0    202.1    229.8 %   1.6    288.5    18348.5 %   486.5

¨ Loss on equity method

    -7.7    54.4    -62.2    N/A     17.4    -25.2    N/A     83.2

¨ Loss on disposition of fixed assets

    6.7    16.3    -9.6    -58.9 %   5.8    0.9    15.9 %   30.9

¨ Others

    47.5    58.0    -10.5    -18.1 %   29.4    18.1    61.4 %   147.7

¡ Interest Expense

- There was a temporary increase in 2Q08 due to indemnification ruled by the Korea Communications Commission on network usage fee for Toll Free Call (080) services.

¡ FX translation loss

- YoY and QoQ increase in FX translation loss due to drop of Won-Dollar exchange rate.

 

 

9

Sep-08

LOGO

 

Broadband                                                                               
     Sep-07     Oct-07     Nov-07     Dec-07     Jan-08     Feb-08     Mar-08     Apr-08     May-08     Jun-08     Jul-08     Aug-08     Sep-08  

Broadband Subs

    6,522,080     6,520,022     6,513,293     6,515,541     6,518,821     6,555,162     6,627,175     6,648,047     6,684,230     6,687,147     6,741,946     6,811,107     6,754,027  

Net Addition

    10,301     -2,058     -6,729     2,248     3,280     36,341     72,013     20,872     36,183     2,917     54,799     69,161     -57,080  

¡ Megapass Lite

    5,639,452     5,618,010     5,592,588     5,573,114     5,554,600     5,565,964     5,599,970     5,600,582     5,613,366     5,596,844     5,629,828     5,662,337     5,611,047  

¡ Megapass Special

    882,628     902,012     920,705     942,427     964,221     989,198     1,027,205     1,047,465     1,070,864     1,090,303     1,112,118     1,148,770     1,142,980  
Broadband M/S                                                                          

KT

    44.7 %   44.5 %   44.3 %   44.3 %   44.1 %   44.2 %   44.3 %   44.2 %   44.4 %   44.4 %   44.7 %   44.7 %  

Hanaro

    25.3 %   25.2 %   25.1 %   24.9 %   24.8 %   24.6 %   24.2 %   24.0 %   23.5 %   23.0 %   22.4 %   21.9 %  

Powercomm

    10.9 %   11.1 %   11.4 %   11.7 %   11.9 %   12.0 %   12.2 %   12.3 %   12.5 %   12.8 %   13.2 %   13.6 %  

Dacom

    0.5 %   0.5 %   0.5 %   0.5 %   0.4 %   0.4 %   0.4 %   0.4 %   0.3 %   0.3 %   0.3 %   0.3 %  

SO

    17.4 %   17.5 %   17.6 %   17.5 %   17.6 %   17.7 %   17.8 %   17.9 %   18.2 %   18.4 %   18.6 %   18.4 %  

Others

    1.2 %   1.1 %   1.1 %   1.1 %   1.1 %   1.1 %   1.1 %   1.1 %   1.0 %   1.0 %   0.9 %   1.1 %  
Wireless                                                                               
     Sep-07     Oct-07     Nov-07     Dec-07     Jan-08     Feb-08     Mar-08     Apr-08     May-08     Jun-08     Jul-08     Aug-08     Sep-08  

Nespot

    419,228     411,653     406,475     401,831     398,743     395,395     391,921     388,506     389,393     387,193     379,663     376,860     370,764  

WiBRO

    64,361     80,431     102,475     106,153     115,917     120,443     145,290     158,190     197,496     201,903     187,601     177,611     172,048  

Wireless Resale

    2,916,277     2,870,464     2,873,989     2,927,201     2,943,999     2,919,223     2,938,583     2,959,223     2,901,544     2,905,973     2,898,953     2,894,718     2,860,213  

- Resale Activation

    86,110     73,883     118,077     180,659     135,652     132,058     195,159     150,140     93,935     166,982     151,074     108,058     81,109  

- Resale Deactivation

    90,365     119,696     114,552     127,447     118,854     156,834     175,799     129,500     151,614     162,553     158,094     112,293     115,614  

- Internal Migration

    193     8,920     2,259     6,745     3,634     28,495     4,912     3,800     4,813     7,852     16,115     8,391     7,240  

- Net Addition

    -4,254     -45,813     3,525     53,212     16,798     -24,776     19,360     20,640     -57,679     4,429     -7,020     -4,235     -34,505  

- Churn Rate

    3.1 %   4.1 %   4.0 %   4.4 %   4.0 %   5.3 %   6.0 %   4.4 %   5.2 %   5.6 %   5.4 %   3.9 %   4.0 %
LOGO  
LOGO Both the ‘activation’ and ‘deactivation’ numbers above include ‘internal migration’(2Gg3G).  
Mega-TV                                                                               
     Sep-07     Oct-07     Nov-07     Dec-07     Jan-08     Feb-08     Mar-08     Apr-08     May-08     Jun-08     Jul-08     Aug-08     Sep-08  

Mega-TV

    148,354     233,809     296,912     324,609     390,027     495,913     567,230     608,734     636,536     705,856     722,857     766,058     808,101  
Fixed-line                                                                               
     Sep-07     Oct-07     Nov-07     Dec-07     Jan-08     Feb-08     Mar-08     Apr-08     May-08     Jun-08     Jul-08     Aug-08     Sep-08  

Telephony (‘000)

    21,184     21,139     21,103     20,919     20,882     20,842     20,818     20,779     20,762     20,741     20,695     20,673     20,621  

Household (‘000)

    20,117     20,064     20,018     19,980     19,936     19,894     19,861     19,817     19,796     19,768     19,719     19,689     19,635  

Business (‘000)

    1,067     1,075     1,085     938     946     948     958     962     966     974     976     984     986  

Domestic Long Distance (‘000)

    18,697     18,658     18,599     18,571     18,563     18,532     18,512     18,512     18,466     18,440     18,397     18,371     18,321  

* Ann (‘000)

    2,214     2,252     2,282     2,308     2,348     2,387     2,433     2,461     2,480     2,532     2,540     2,552     2,584  

* Ringo (‘000)

    3,783     3,610     3,605     3,843     3,830     3,817     3,821     3,813     3,819     3,815     3,805     3,794     3,773  

* Caller ID Users (‘000)

    5,538     5,538     5,532     5,538     5,548     5,553     5,569     5,582     5,599     5,599     5,591     5,590     5,586  

* My Style (Local) (‘000)

    1,075     1,060     1,044     1,022     1,013     1,005     985     966     950     933     916     902     887  

* My Style (DLD) (‘000)

    951     936     920     897     885     877     858     839     823     808     792     780     767  
Fixed-line M/S                                                                          

Local M/S (subscriber base)

    91.0 %   90.8 %   90.6 %   90.4 %   90.3 %   90.2 %   90.1 %   90.1 %   90.1 %   90.1 %   90.1 %   90.1 %  

DLD (revenue base)

    85.6 %   85.5 %   85.4 %   85.4 %   85.4 %   85.4 %   85.3 %   85.3 %   85.3 %   85.5 %   85.6 %   85.7 %  
Reference Data                                                                          
     Sep-07     Oct-07     Nov-07     Dec-07     Jan-08     Feb-08     Mar-08     Apr-08     May-08     Jun-08     Jul-08     Aug-08     Sep-08  

Population (‘000)

    48,457     48,457     48,457     48,457     48,444     48,481     48,494     48,507     48,519     48,532     48,544     48,557     48,569  

Number of Household (‘000)

    16,194     16,194     16,194     16,194     16,194     16,673     16,673     16,673     16,673     16,673     16,673     16,673     16,673  

LOGO Broadband

- Reorganized service lineup into 2 price packages- Lite and Special in May 19, 2008. Previous Lite, PremiumgLite(50M), Special, NtopiagSpecial(100M)

LOGO Fixed-line

- Telephony : From Jan.2008, number of business line subscribers will be included in Telephony, pursuant to the reporting rules of KCC

- Household : Formerly ‘Local’ subscribers