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 May 2010

Commission File Number 1-14926

 

 

KT Corporation

 

 

206 Jungja-dong

Bundang-gu, Sungnam

Kyunggi-do

463-711

Korea

 

 

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      Ö            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      Ö    

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: May 3, 2010
KT Corporation
By:  

/s/    THOMAS BUM JOON KIM        

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

/s/    YOUNG JIN KIM        

Name:   Young Jin Kim
Title:   Director

April 30, 2010

 

 

 

 

LOGO

 

 

 

1st Quarter 2010

Preliminary Earnings Commentary

(KRX : 030200 / NYSE : KT)

Disclaimer

This material contains estimated information of unaudited preliminary financial and operating data of KT Corporation (“KT” or “the company”) for the first quarter of 2010 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 2010 first quarter will be filed with the Financial Supervisory Service(FSS) and the Korea Exchange(KRX) on May 17, 2010.

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

Tel : 82-31-727-1911~3

Fax : 82-31-727-0159

E-mail: ir@kt.com

 2010 1Q KT Earnings Release - KGAAP version

 

 

This material contains the financial statements of the merged entity prepared in accordance with Korean GAAP.

Note that all financial results before June 1, 2009 (merger date) are of KT before the merger.

 

 

 

1.

 

  

Financial Highlights

 

                  

(unit : KRW bn) 

 

 

A.

 

  

Income Statement

 

      ’10-1Q        

 

      ’09-1Q        

 

      YoY        

 

      ’10-1Q        

 

      ’09-4Q        

 

      QoQ        

 

 

Operating Revenue

      4,822.2      2,773.1      73.9%      4,822.2      4,747.6      1.6%
     Service Revenue      3,836.2      2,593.9      47.9%      3,836.2      3,893.2      -1.5%
     Sales of Merchandise      986.0      179.2      450.3%      986.0      854.4      15.4%
     ¨ Wireless      2,577.9      336.0      667.3%      2,577.9      2,468.2      4.4%
     ¨ Telephone      1,120.6      1,264.5      -11.4%      1,120.6      1,150.8      -2.6%
     ¨ Internet      665.6      642.3      3.6%      665.6      648.5      2.6%
     ¨ Data      329.2      417.3      -21.1%      329.2      322.7      2.0%
     ¨ Real estate      50.9      65.3      -22.1%      50.9      76.7      -33.6%
     ¨ Others      78.1      47.7      63.5%      78.1      80.8      -3.4%
                                   
 

Operating Expense

      4,269.6      2,388.6      78.7%      4,269.6      5,297.1      -19.4%
     ¨ Labor expense      611.7      598.2      2.3%      611.7      1,498.5      -59.2%
     ¨ Commission      314.9      207.3      51.9%      314.9      346.7      -9.2%
     ¨ Sales promotion      265.8      61.3      333.9%      265.8      275.4      -3.5%
     ¨ Sales commission      430.2      171.8      150.4%      430.2      398.4      8.0%
     ¨ Bad debt expense      24.9      15.6      59.5%      24.9      15.7      58.2%
     ¨ Depreciation & Amortization      695.6      485.0      43.4%      695.6      857.7      -18.9%
     ¨ Advertising      40.9      8.4      385.7%      40.9      43.9      -6.8%
     ¨ Repair & Maintenance      24.4      17.3      41.0%      24.4      55.0      -55.6%
     ¨ Cost of goods sold      955.6      127.2      651.5%      955.6      828.1      15.4%
     ¨ Cost of service provided      549.7      456.0      20.5%      549.7      574.8      -4.4%
     ¨ Research & Development      58.5      43.8      33.6%      58.5      80.5      -27.3%
     ¨ Activation, Installation & A/S cost      87.2      73.1      19.4%      87.2      97.8      -10.8%
     ¨ Others      210.0      123.8      69.6%      210.0      224.7      -6.5%
                                   
 

Operating Income

      552.7      384.5      43.7%      552.7      -549.5      TB        
 

EBITDA

      1,248.3      869.4      43.6%      1,248.3      308.2      305.1%
   
  Non-operating Income      228.6      225.1      1.5%      228.6      152.2      50.2%
  Non-operating Expense      303.2      434.1      -30.1%      303.2      236.0      28.5%
   
 

Income before Income Taxes

      478.0      175.5      172.3%      478.0      -633.3      TB        
 

Income tax

      105.5      36.0      193.2%      105.5      -202.8     
                                   
  Net Income      372.5      139.6      166.9%      372.5      -430.5      TB        
                                             

 

2

B.

 

  

Balance Sheet

 

  

      ’10-1Q      

 

   

      ’09-1Q      

 

   

      YoY      

 

   

      ’10-1Q      

 

   

      ’09-4Q      

 

   

      QoQ      

 

 

Total Assets

   23,662.8    18,841.8    25.6%    23,662.8    24,342.5    -2.8%
     ¨ Current assets   6,057.0    4,208.1    43.9%    6,057.0    6,474.6    -6.4%
      O Quick assets   5,510.2    4,042.5    36.3%    5,510.2    5,867.8    -6.1%
       - Cash & cash equivalents   1,054.6    1,763.0    -40.2%    1,054.6    1,574.6    -33.0%
       - Accounts receivables   3,677.9    1,734.0    112.1%    3,677.9    3,491.1    5.4%
      O Inventories   546.8    165.6    230.2%    546.8    606.8    -9.9%
     ¨ Non-current assets   17,605.8    14,633.7    20.3%    17,605.8    17,867.9    -1.5%
      O Investment   1,395.2    3,542.2    -60.6%    1,395.2    1,274.7    9.5%
       - Investment stocks accounted in equity method   1,201.2    3,490.0    -65.6%    1,201.2    1,081.0    11.1%
       - Available-for-sale securities   57.0    18.0    216.2%    57.0    60.3    -5.3%
      O Tangible assets   13,834.7    10,107.4    36.9%    13,834.7    14,203.8    -2.6%
      O Intangible assets   1,127.4    361.9    211.5%    1,127.4    1,206.6    -6.6%
      O Others   1,248.4    622.2    100.6%    1,248.4    1,182.8    5.5%
  Total Liabilities   13,388.1    10,310.5    29.9%    13,388.1    13,944.2    -4.0%
     ¨ Current liabilities   5,580.5    2,686.4    107.7%    5,580.5    5,684.3    -1.8%
      O Current portion of LT debt   1,387.3    629.0    120.6%    1,387.3    1,024.7    35.4%
      O Current portion of LT accrued payables   162.6    0.0         162.6    148.5    9.4%
      O Accounts payable   1,181.2    491.8    140.2%    1,181.2    1,350.1    -12.5%
      O Others   2,849.5    1,565.7    82.0%    2,849.5    3,160.9    -9.9%
     ¨ Non-current liabilities   7,807.6    7,624.1    2.4%    7,807.6    8,259.9    -5.5%
      O Bonds   6,454.0    6,218.4    3.8%    6,454.0    6,739.1    -4.2%
      O Long-term borrowings   60.1    25.7    133.7%    60.1    63.1    -4.8%
      O Long-term accounts payables   0.0    0.0         0.0    160.8    -100.0%
      O Installation deposit   674.8    763.1    -11.6%    674.8    696.7    -3.1%
      O Others   618.6    616.8    0.3%    618.6    600.2    3.1%
  Total Stockholders’ Equity   10,274.6    8,531.4    20.4%    10,274.6    10,398.3    -1.2%
     ¨ Common stock   1,564.5    1,561.0    0.2%    1,564.5    1,564.5    0.0%
     ¨ Capital surplus   1,448.6    1,440.6    0.6%    1,448.6    1,448.6    0.0%
     ¨ Retained earnings   8,572.5    9,727.4    -11.9%    8,572.5    9,595.5    -10.7%
     ¨ Capital adjustment   -1,276.5    -4,158.3    -69.3%    -1,276.5    -2,165.7    -41.1%
      O Treasury stock   -956.2    -3,989.2    -76.0%    -956.2    -956.2    0.0%
      O Gain/loss on disposal of treasury stock   0.0    0.0         0.0    -890.7    -100.0%
    ¨ Accumulated Other Comprehensive Income   -34.4    -39.3    -12.6%    -34.4    -44.5    -22.8%
  Total interesting bearing debt   8,349.0    6,913.3    20.8%    8,349.0    8,136.3    2.6%
  Net debt   7,131.8    5,150.3    38.5%    7,131.8    6,252.4    14.1%
  Net debt (including LT A/P)   7,294.4    5,150.3    41.6%    7,294.4    6,561.7    11.2%
  Debt/ equity ratio   130.3%    120.9%    9.4%p    130.3%    134.1%    -3.8%p
  Net debt/ equity ratio   69.4%    60.4%    9.0%p    69.4%    60.1%    9.3%p
  Net debt/ equity ratio (including LT A/P)   71.0%    60.4%    10.6%p    71.0%    63.1%    7.9%p

 

3

2.    Operating Results    (unit : KRW bn) 

 

A.   Wireless Revenue       

        ‘10-1Q        

   

      ‘09-1Q       

   

     YoY        

   

       ‘10-1Q        

   

       ‘09-4Q      

   

        QoQ       

 

 

    ¨ Service revenue

      1,683.4     230.3    630.8%    1,683.4     1,695.3    -0.7%
 

 

O Monthly base fee

      601.1     126.0    377.0%    601.1     577.7    4.1%
 

 

O Airtime charge

      414.1     70.8    485.2%    414.1     436.5    -5.2%
 

 

O VAS / others

      53.9     6.2    767.5%    53.9     58.9    -8.5%
 

 

O Wireless data

      332.0     17.2    1828.7%    332.0     319.1    4.0%
 

 

O Interconnection revenue

      212.4     0.0       212.4     214.8    -1.1%
 

 

O Others

      69.9     10.1    602.6%    69.9     88.2    -20.8%
 

 

    ¨ Handset sales

      894.5     105.6    746.9%    894.5     772.9    15.7%
         2,577.9     336.0    667.3%    2,577.9     2,468.2    4.4%
                     
                     
                     
B.   Telephone Revenue       

        ‘10-1Q        

   

      ‘09-1Q       

   

     YoY        

   

       ‘10-1Q        

   

       ‘09-4Q      

   

        QoQ       

 

 

    ¨ Subscriber connection

      277.7     320.0    -13.2%    277.7     285.8    -2.9%
 

 

O Activation & Installation fee

     7.5     9.3    -18.8%    7.5     8.1    -7.1%
 

 

O Monthly base fee

      223.5     255.5    -12.5%    223.5     232.0    -3.7%
 

 

O Interconnection

      46.6     55.2    -15.5%    46.6     45.7    2.0%
 

 

    ¨ Local

      171.2     203.1    -15.7%    171.2     164.0    4.4%
 

 

O Local airtime charge

      101.8     126.3    -19.4%    101.8     105.7    -3.7%
 

 

O Local interconnection

      19.2     21.6    -11.1%    19.2     19.1    0.5%
 

 

O Others

      50.2     55.2    -9.0%    50.2     39.3    27.9%
 

 

    ¨ Domestic long distance

      96.0     123.0    -22.0%    96.0     103.1    -6.9%
 

 

O DLD airtime charge

      91.2     117.6    -22.4%    91.2     98.4    -7.3%
 

 

O DLD interconnection

      4.6     5.2    -12.4%    4.6     4.5    0.7%
 

 

O Others

      0.2     0.2    -19.6%    0.2     0.2    -12.9%
 

 

    ¨ LM revenue

      249.4     305.2    -18.3%    249.4     266.4    -6.4%
 

 

    ¨ International long distance

      28.5     35.3    -19.3%    28.5     31.9    -10.7%
 

 

    ¨ International long distance settlement

      39.0     63.5    -38.6%    39.0     47.0    -17.1%
 

 

    ¨ VoIP

      87.0     41.5    109.7%    87.0     81.4    6.8%
 

 

    ¨ VAS

      85.4     77.0    10.9%    85.4     83.6    2.1%
 

 

    ¨ Public phones & 114 service

      37.4     44.5    -15.8%    37.4     38.1    -1.7%
 

 

    ¨ Others

      49.0     51.5    -4.7%    49.0     49.4    -0.7%
         1,120.6     1,264.5    -11.4%    1,120.6     1,150.8    -2.6%
                     
                     
                     
C.    Internet Revenue       

        ‘10-1Q        

   

      ‘09-1Q       

   

     YoY        

   

       ‘10-1Q        

   

       ‘09-4Q      

   

        QoQ       

 

 

Internet Access

      511.5     519.5    -1.5%    511.5     505.1    1.3%
 

 

    ¨ Broadband

      465.0     485.0    -4.1%    465.0     463.1    0.4%
 

 

    ¨ Nespot

      5.1     6.5    -21.6%    5.1     5.4    -5.8%
 

 

    ¨ WiBro

      40.4     27.5    46.9%    40.4     35.4    14.3%
 

 

    ¨ Others

      1.0     0.5    113.2%    1.0     1.2    -12.6%
 

 

Internet Application

      154.1     122.8    25.5%    154.1     143.4    7.5%
 

 

    ¨ IDC

      57.4     50.8    12.9%    57.4     59.5    -3.6%
 

 

    ¨ bizmeka

      45.1     33.1    36.3%    45.1     32.8    37.4%
 

 

    ¨ IPTV

      34.5     19.9    73.8%    34.5     33.3    3.6%
 

 

    ¨ Others

      17.1     19.0    -10.2%    17.1     17.7    -3.6%
         665.6     642.3    3.6%    665.6     648.5    2.6%

 

4

D.    Data Revenue          ‘10-1Q            ‘09-1Q            YoY            ‘10-1Q            ‘09-4Q            QoQ    
 

   ¨ Leased line

     184.5    277.9   -33.6%    184.5    186.2   -0.9%
 

 

O Local

     76.6    115.2   -33.6%    76.6    77.0   -0.6%
 

 

O Domestic long distance

     71.0    85.1   -16.7%    71.0    65.7   8.0%
 

 

O International long distance

     4.3    6.3   -32.5%    4.3    6.4   -33.4%
 

 

O Broadcasting & others

     32.7    71.3   -54.1%    32.7    37.1   -11.7%
 

 

   ¨ Kornet

     63.5    63.7   -0.3%    63.5    59.9   6.1%
 

 

   ¨ VPN

     24.4    16.9   43.9%    24.4    22.8   7.1%
 

 

   ¨ National network ATM

     7.8    21.7   -64.1%    7.8    10.3   -24.5%
 

 

   ¨ Satellite

     34.0    26.8   26.9%    34.0    26.6   27.8%
 

 

   ¨ Others

     14.9    10.2   46.2%    14.9    17.0   -12.0%
        329.2    417.3   -21.1%    329.2    322.7   2.0%
               
E.    Operating Expense     ‘10-1Q   ‘09-1Q   YoY   ‘10-1Q   ‘09-4Q   QoQ
 

Labor Expense

     611.7    598.2   2.3%    611.7    1,498.5   -59.2%
 

 

   ¨ Salaries & wages

     462.1    445.2   3.8%    462.1    478.2   -3.3%
 

 

   ¨ Provision for retirement

     76.1    40.2   89.2%    76.1    905.2   -91.6%
 

 

   ¨ Employee welfare

     73.5    112.8   -34.9%    73.5    115.2   -36.2%
 

 

Commission

     314.9    207.3   51.9%    314.9    346.7   -9.2%
 

 

Sales Promotion

     265.8    61.3   333.9%    265.8    275.4   -3.5%
 

 

Sales Commission

     430.2    171.8   150.4%    430.2    398.4   8.0%
 

 

Bad Debt Expenses

     24.9    15.6   59.5%    24.9    15.7   58.2%
 

 

Depreciation & Amortization

     695.6    485.0   43.4%    695.6    857.7   -18.9%
 

 

Advertising

     40.9    8.4   385.7%    40.9    43.9   -6.8%
 

 

Repair & Maintenance

     24.4    17.3   41.0%    24.4    55.0   -55.6%
 

 

Cost of Goods Sold

     955.6    127.2   651.5%    955.6    828.1   15.4%
 

 

   ¨ Cost of mobile handset sold

     871.5    54.4   1502.9%    871.5    724.2   20.3%
 

 

   ¨ Others

     84.1    72.8   15.5%    84.1    103.9   -19.1%
 

 

Cost of Service Provided

     549.7    456.0   20.5%    549.7    574.8   -4.4%
 

 

   ¨ Cost of service

     142.0    210.6   -32.6%    142.0    150.9   -5.9%
 

 

   ¨ International long distance settlement cost

     70.4    60.3   16.7%    70.4    65.2   8.0%
 

 

   ¨ Interconnection expense

     298.0    165.2   80.4%    298.0    306.3   -2.7%
 

 

   ¨ Others

     39.2    20.0   96.3%    39.2    52.4   -25.1%
 

 

Research & Development

    58.5    43.8   33.6%    58.5    80.5   -27.3%
 

 

Activation, Installation & A/S Cost

     87.2    73.1   19.4%    87.2    97.8   -10.8%
 

 

Others

     210.0    123.8   69.6%    210.0    224.7   -6.5%
        4,269.6    2,388.6   78.7%    4,269.6    5,297.1   -19.4%
               
  ¢ Marketing Cost    

 

‘10-1Q

 

   ‘09-1Q   YoY   ‘10-1Q   ‘09-4Q   QoQ
 

   ¨ Sales Promotion

     265.8    61.3   333.9%    265.8    275.4   -3.5%
 

 

   ¨ Sales Commission

     430.2    171.8   150.4%    430.2    398.4   8.0%
 

 

   ¨ Advertising

     40.9    8.4   385.7%    40.9    43.9   -6.8%
 

 

(Profits from mobile handset sold)

     -22.9    -51.2   -55.2%    -22.9    -48.7   -52.9%
        714.1    190.2   275.4%    714.1    669.0   6.7%
               
  ¢ Interconnection Expenses    

 

‘10-1Q

 

   ‘09-1Q   YoY   ‘10-1Q   ‘09-4Q   QoQ
 

O MM

     170.1    0.0     170.1    176.8   -3.8%
 

 

O ML

     7.2    0.0     7.2    7.6   -5.3%
 

 

O LM

     95.2    144.6   -34.2%    95.2    99.1   -3.9%
 

 

O Others

     25.4    20.5   23.9%    25.4    22.8   11.7%
        298.0    165.2   80.4%    298.0    306.3   -2.7%

 

5

F. 

 

  

 

Non-operating

 

  

 

     ‘10-1Q        

 

  

 

     ‘09-1Q       

 

  

 

     YoY    

 

    

 

     ‘10-1Q        

 

  

 

     ‘09-4Q       

 

  

 

     QoQ    

 

  
 

 

   ¨ Interest Income

   24.5    26.0   -5.6 %    24.5    38.3   -35.9 % 
 

 

   ¨ Gain on foreign currency transaction

   3.1    14.6   -78.6 %    3.1    5.7   -45.6 % 
 

 

   ¨ Gain on foreign currency translation

   94.2    18.1   420.5 %    94.2    55.0   71.2 % 
 

 

   ¨ Gain on Equity Method

   23.4    57.2   -59.1 %    23.4    38.1   -38.6 % 
 

 

   ¨ Gain on disposal of tangible assets

   10.6    0.4   2295.0 %    10.6    1.8   488.4 % 
 

 

   ¨ Others

   72.7    108.8   -33.1 %    72.7    13.2   450.9 % 
 

Non-operating Income

   228.6    225.1   1.5 %    228.6    152.2   50.2 % 
 

 

   ¨ Interest Expense

   135.1    98.1   37.7 %    135.1    132.2   2.2 % 
 

 

   ¨ Loss on foreign currency transaction

   4.0    12.2   -67.3 %    4.0    6.9   -42.4 % 
 

 

   ¨ Loss on foreign currency translation

   5.7    242.4   -97.6 %    5.7    -2.6   -319.0 % 
 

 

   ¨ Loss on Equity Method

   15.9    23.8   -33.1 %    15.9    10.4   53.1 % 
 

 

   ¨ Loss on disposal of tangible assets

   21.8    4.9   347.2 %    21.8    53.8   -59.5 % 
 

 

   ¨ Others

   120.6    52.7   128.7 %    120.6    35.2   242.6 % 
 

 

Non-operating Expense

   303.2    434.1   -30.1 %    303.2    236.0   28.5 % 

 

6

[Attachment]

2010 1Q KT Earnings Release - Guidance version

 

The unaudited business and financial results of the merged company contained in this material prepared in accordance with Korean GAAP is for the sole convenience of investors and analysts.

 

 

1.

 

  

 

Financial Highlights

 

      

 

(unit : KRW bn)

 

 

A.   Income Statement            ‘10-1Q              ‘09-1Q              YoY             ‘10-1Q              ‘09-4Q                QoQ      
 

Operating Revenue

      4,822.2    4,514.5    6.8 %    4,822.2    4,747.6    1.6 % 
 

Service Revenue

      3,836.2    3,787.7    1.3 %    3,836.2    3,893.2    -1.5 % 
 

Sales of Merchandise

      986.0    726.8    35.7 %    986.0    854.4    15.4 % 
 

¨ Wireless

      2,577.9    2,183.0    18.1 %    2,577.9    2,468.2    4.4 % 
 

¨ Telephone

      1,120.6    1,239.9    -9.6 %    1,120.6    1,150.8    -2.6 % 
 

¨ Internet

      665.6    640.7    3.9 %    665.6    648.5    2.6 % 
 

¨ Data

      329.2    335.5    -1.9 %    329.2    322.7    2.0 % 
 

¨ Real estate

      50.9    69.1    -26.4 %    50.9    76.7    -33.6 % 
 

¨ Others

      78.1    46.2    69.1 %    78.1    80.8    -3.4 % 
 
  Operating Expense      4,269.6    3,916.3    9.0 %    4,269.6    5,297.1    -19.4 % 
 

¨ Labor expense

      611.7    660.0    -7.3 %    611.7    1,498.5    -59.2 % 
 

¨ Commission

      314.9    299.5    5.2 %    314.9    346.7    -9.2 % 
 

¨ Sales promotion

      265.8    194.1    36.9 %    265.8    275.4    -3.5 % 
 

¨ Sales commission

      430.2    503.9    -14.6 %    430.2    398.4    8.0 % 
 

¨ Bad debt expense

      24.9    35.1    -29.1 %    24.9    15.7    58.2 % 
 

¨ Depreciation & Amortization

      695.6    775.3    -10.3 %    695.6    857.7    -18.9 % 
 

¨ Advertising

      40.9    26.3    55.4 %    40.9    43.9    -6.8 % 
 

¨ Repair & Maintenance

      24.4    27.8    -12.3 %    24.4    55.0    -55.6 % 
 

¨ Cost of goods sold

      955.6    568.0    68.2 %    955.6    828.1    15.4 % 
 

¨ Cost of service provided

      549.7    493.6    11.4 %    549.7    574.8    -4.4 % 
 

¨ Research & Development

      58.5    44.9    30.4 %    58.5    80.5    -27.3 % 
 

¨ Activation, Installation & A/S cost

      87.2    73.1    19.4 %    87.2    97.8    -10.8 % 
 

¨ Others

      210.0    214.8    -2.2 %    210.0    224.7    -6.5 % 
 
  Operating Income      552.7    598.2    -7.6 %    552.7    -549.5    TB   
  EBITDA      1,248.3    1,373.5    -9.1 %    1,248.3    308.2    305.1 % 
 
 

Non-operating Income

      228.6    252.2    -9.4 %    228.6    152.2    50.2 % 
 

Non-operating Expense

      303.2    561.1    -46.0 %    303.2    236.0    28.5 % 
 
  Income before Income Taxes      478.0    289.3    65.2 %    478.0    -633.3    TB   
 

Income tax

      105.5    91.6    15.2 %    105.5    -185.0   
 
  Net Income      372.5    197.7    88.4 %    372.5    -448.3    TB   
                                      
                  ‘10-1Q               ‘09-1Q               YoY              ‘10-1Q               ‘09-4Q                 QoQ      
  CAPEX      480.8    299.5    60.6 %    480.8    1,471.6    -67.3 % 

 

7

B.   Balance Sheet            ‘10-1Q            ‘09-1Q            YoY            ‘10-1Q            ‘09-4Q            QoQ    
 

 

Total Assets

     23,662.8    24,385.8    -3.0%    23,662.8    24,342.5    -2.8% 
 

 

   ¨ Current assets

     6,057.0    6,454.7    -6.2%    6,057.0    6,474.6    -6.4% 
 

 

O Quick assets

     5,510.2    6,062.3    -9.1%    5,510.2    5,867.8    -6.1% 
 

 

- Cash & cash equivalents

    1,054.6    2,291.1    -54.0%    1,054.6    1,574.6    -33.0% 
 

 

- Accounts receivables

     3,677.9    3,010.3    22.2%    3,677.9    3,491.1    5.4% 
 

 

O Inventories

     546.8    392.3    39.4%    546.8    606.8    -9.9% 
 

 

   ¨ Non-current assets

     17,605.8    17,931.2    -1.8%    17,605.8    17,867.9    -1.5% 
 

 

O Investment

     1,395.2    1,228.8    13.5%    1,395.2    1,274.7    9.5% 
 

 

- Investment stocks accounted in equity method

     1,201.2    899.3    33.6%    1,201.2    1,081.0    11.1% 
 

 

- Available-for-sale securities

    57.0    242.1    -76.4%    57.0    60.3    -5.3% 
 

 

O Tangible assets

     13,834.7    14,173.4    -2.4%    13,834.7    14,203.8    -2.6% 
 

 

O Intangible assets

     1,127.4    1,278.1    -11.8%    1,127.4    1,206.6    -6.6% 
 

 

O Others

     1,248.4    1,250.8    -0.2%    1,248.4    1,182.8    5.5% 
 

 

Total Liabilities

     13,388.1    13,796.8    -3.0%    13,388.1    13,944.2    -4.0% 
 

 

   ¨ Current liabilities

     5,580.5    4,825.3    15.7%    5,580.5    5,684.3    -1.8% 
 

 

O Current portion of LT debt

     1,387.3    1,113.9    24.5%    1,387.3    1,024.7    35.4% 
 

 

O Current portion of LT accrued payables

     162.6    143.4    13.4%    162.6    148.5    9.4% 
 

 

O Accounts payable

     1,181.2    786.0    50.3%    1,181.2    1,350.1    -12.5% 
 

 

O Others

     2,849.5    2,782.0    2.4%    2,849.5    3,160.9    -9.9% 
 

 

   ¨ Non-current liabilities

     7,807.6    8,971.5    -13.0%    7,807.6    8,259.9    -5.5% 
 

 

O Bonds

     6,454.0    7,225.6    -10.7%    6,454.0    6,739.1    -4.2% 
 

 

O Long-term borrowings

     60.1    108.4    -44.5%    60.1    63.1    -4.8% 
 

 

O Long-term accounts payables

    0.0    155.5    -100.0%    0.0    160.8    -100.0% 
 

 

O Installation deposit

     674.8    763.1    -11.6%    674.8    696.7    -3.1% 
 

 

O Others

     618.6    719.1    -14.0%    618.6    600.2    3.1% 
 

 

Total Stockholders’ Equity

     10,274.6    10,589.0    -3.0%    10,274.6    10,398.3    -1.2% 
 

 

   ¨ Common stock

     1,564.5    1,564.5    0.0%    1,564.5    1,564.5    0.0% 
 

 

   ¨ Capital surplus

     1,448.6    1,440.6    0.6%    1,448.6    1,448.6    0.0% 
 

 

   ¨ Retained earnings

     8,572.5    9,727.4    -11.9%    8,572.5    9,595.5    -10.7% 
 

 

   ¨ Capital adjustment

     -1,276.5    -2,099.0    -39.2%    -1,276.5    -2,165.7    -41.1% 
 

 

O Treasury stock

     -956.2    -1,552.5    -38.4%    -956.2    -956.2    0.0% 
 

 

O Gain/loss on disposal of treasury stock

     0.0    -791.7    -100.0%    0.0    -890.7    -100.0% 
 

 

   ¨ Accumulated Other Comprehensive Income

 

     -34.4 

 

   -44.6 

 

   -22.9% 

 

   -34.4 

 

   -44.5 

 

   -22.8% 

 

 

 

Total interesting bearing debt

     8,349.0    9,146.7    -8.7%    8,349.0    8,136.3    2.6% 
 

 

Net debt

     7,131.8    6,556.7    8.8%    7,131.8    6,252.4    14.1% 
 

 

Net debt (including LT A/P)

 

     7,294.4 

 

   6,855.6 

 

   6.4% 

 

   7,294.4 

 

   6,561.7 

 

   11.2% 

 

 

 

Debt/ equity ratio

     130.3%    130.3%    0.0%p    130.3%    134.1%    -3.8%p 
 

 

Net debt/ equity ratio

    69.4%    61.9%    7.5%p    69.4%    60.1%    9.3%p 
 

 

Net debt/ equity ratio (including LT A/P)

 

     71.0% 

 

   64.7% 

 

   6.3%p 

 

   71.0% 

 

   63.1% 

 

   7.9%p 

 

 

8

2. Operating Results                        (unit : KRW bn)

 

A.   Wireless Revenue          ‘10-1Q            ‘09-1Q            YoY            ‘10-1Q            ‘09-4Q            QoQ    
 

 

   ¨ Service revenue

     1,683.4    1,528.9    10.1%    1,683.4    1,695.3   -0.7%
 

 

O Monthly base fee

     601.1    539.5    11.4%    601.1    577.7   4.1%
 

 

O Airtime charge

     414.1    406.0    2.0%    414.1    436.5   -5.2%
 

 

O VAS / others

     53.9    65.6    -17.8%    53.9    58.9   -8.5%
 

 

O Wireless data

     332.0    275.4    20.6%    332.0    319.1   4.0%
 

 

O Interconnection revenue

     212.4    198.1    7.2%    212.4    214.8   -1.1%
 

 

O Activation fee

     31.3    27.0    15.9%    31.3    23.7   32.2%
 

 

O Others

     38.6    17.2    123.8%    38.6    64.5   -40.3%
 

 

   ¨ Handset sales

 

     894.5 

 

   654.2 

 

   36.7% 

 

   894.5 

 

   772.9

 

   15.7%

 

       

 

2,577.9 

 

   2,183.0 

 

   18.1% 

 

   2,577.9 

 

   2,468.2

 

   4.4%

 

  O Monthly base fee     Subscriber growth and increasing high monthly fee subscribers such as Smartphone users resulted in healthy QoQ and YoY growth.
  O Airtime charge     Expanded discounts and seasonality caused QoQ drop.
  O Wireless data usage     Bolstered data usage from increasing adoption of Smartphones led to QoQ and YoY growth.
  O Handset sales     Increased subscriber gross addition and Smartphone sales caused handset sales growth.
               
B.   Telephone Revenue     ‘10-1Q   ‘09-1Q   YoY   ‘10-1Q   ‘09-4Q   QoQ
 

 

  ¨ Subscriber connection

    

 

277.7 

   304.7   -8.9%   277.7    285.8   -2.9%
 

 

 O Activation & Installation fee

     7.5    9.3   -18.8%   7.5    8.1   -7.1%
 

 

 O Monthly base fee

     223.5    255.4   -12.5%   223.5    232.0   -3.7%
 

 

 O Interconnection

     46.6    40.1   16.4%   46.6    45.7   2.0%
 

 

  ¨ Local

     171.2    197.6   -13.4%   171.2    164.0   4.4%
 

 

 O Local airtime charge

     101.8    126.3   -19.4%   101.8    105.7   -3.7%
 

 

 O Local interconnection

     19.2    17.4   10.4%   19.2    19.1   0.5%
 

 

 O Others

     50.2    53.9   -6.9%   50.2    39.3   27.9%
 

 

  ¨ Domestic long distance

     96.0    123.8   -22.5%   96.0    103.1   -6.9%
 

 

 O DLD airtime charge

     91.2    117.6   -22.4%   91.2    98.4   -7.3%
 

 

 O DLD interconnection

     4.6    6.0   -24.0%   4.6    4.5   0.7%
 

 

 O Others

     0.2    0.2   -19.6%   0.2    0.2   -12.9%
 

 

  ¨ LM revenue

     249.4    305.1   -18.2%   249.4    266.4   -6.4%
 

 

  ¨ International long distance

     28.5    35.3   -19.3%   28.5    31.9   -10.7%
 

 

  ¨ International long distance settlement

     39.0    63.5   -38.6%   39.0    47.0   -17.1%
 

 

  ¨ VoIP

     87.0    41.5   109.8%   87.0    81.4   6.8%
 

 

  ¨ VAS

     85.4    74.5   14.6%   85.4    83.6   2.1%
 

 

  ¨ Public phones & 114 service

     37.4    42.4   -11.8%   37.4    38.1   -1.7%
 

 

  ¨ Others

 

     49.0 

 

   51.4

 

   -4.7%

 

   49.0 

 

   49.4

 

   -0.7%

 

       

 

1,120.6 

 

   1,239.9

 

   -9.6%

 

   1,120.6 

 

   1,150.8

 

   -2.6%

 

  O Local     QoQ growth attributed by reflection of USF (Universal Service Fund) in the previous quarter.
  O DLD & LM     Declined PSTN subscribers led to YoY drop.
  O VoIP     Rapidly rising subscribers resulted in 110% YoY and 6.8% QoQ growth.

 

9

C.   Internet Revenue          ‘10-1Q            ‘09-1Q            YoY            ‘10-1Q            ‘09-4Q            QoQ    
 

 

Internet Access

     511.5    518.2   -1.3%   511.5    505.1   1.3%
 

 

   ¨ Broadband

     465.0    483.8   -3.9%   465.0    463.1   0.4%
 

 

   ¨ Nespot

     5.1    6.5   -21.6%   5.1    5.4   -5.8%
 

 

   ¨ WiBro

     40.4    27.4   47.6%   40.4    35.4   14.3%
 

 

   ¨ Others

     1.0    0.5   113.2%   1.0    1.2   -12.6%
 

 

Internet Application

     154.1    122.5   25.8%   154.1    143.4   7.5%
 

 

   ¨ IDC

     57.4    50.6   13.4%   57.4    59.5   -3.6%
 

 

   ¨ bizmeka

     45.1    33.0   36.5%   45.1    32.8   37.4%
 

 

   ¨ IPTV

     34.5    19.9   73.8%   34.5    33.3   3.6%
 

 

   ¨ Others

 

     17.1 

 

   19.0

 

   -10.2%

 

   17.1 

 

   17.7

 

   -3.6%

 

        665.6 

 

   640.7

 

   3.9%

 

   665.6 

 

   648.5

 

   2.6%

 

  O Broadband     Despite ARPU erosion from increasing discounts to bundling and long-term contract subscribers, subscriber expansion led to positive growth.
  O WiBro     Stable growth from rising subscribers.
  O IPTV     Expanding subscriber base resulted in healthy growth.
     
D.   Data Revenue          ‘10-1Q            ‘09-1Q            YoY            ‘10-1Q            ‘09-4Q            QoQ    
 

 

   ¨ Leased line

     184.5    197.3   -6.5%   184.5    186.2   -0.9%
 

 

      O Local

     76.6    77.1   -0.7%   76.6    77.0   -0.6%
 

 

      O Domestic long distance

     71.0    63.0   12.5%   71.0    65.7   8.0%
 

 

      O International long distance

     4.3    6.3   -31.9%   4.3    6.4   -33.4%
 

 

      O Broadcasting & others

     32.7    50.9   -35.7%   32.7    37.1   -11.7%
 

 

   ¨ Kornet

     63.5    63.3   0.4%   63.5    59.9   6.1%
 

 

   ¨ VPN

     24.4    16.2   50.3%   24.4    22.8   7.1%
 

 

   ¨ National network ATM

     7.8    21.7   -64.1%   7.8    10.3   -24.5%
 

 

   ¨ Satellite

     34.0    26.8   27.0%   34.0    26.6   27.8%
 

 

   ¨ Others

 

     14.9 

 

   10.2

 

   46.2%

 

   14.9 

 

   17.0

 

   -12.0%

 

        329.2 

 

   335.5

 

   -1.9%

 

   329.2 

 

   322.7

 

   2.0%

 

  O Data     Slightly increased QoQ due to leased line sales growth.

 

10

E.

   Operating Expense         ‘10-1Q           ‘09-1Q           YoY           ‘10-1Q           ‘09-4Q           QoQ    
 

 

Labor Expense

     611.7    660.0   -7.3%   611.7    1,498.5   -59.2%
 

 

  ¨ Salaries & wages

     462.1    494.1   -6.5%   462.1    478.2   -3.3%
 

 

  ¨ Provision for retirement

     76.1    45.0   69.1%   76.1    905.2   -91.6%
 

 

  ¨ Employee welfare

     73.5    120.9   -39.2%   73.5    115.2   -36.2%
 

 

Commission

     314.9    299.5   5.2%   314.9    346.7   -9.2%
 

 

Sales Promotion

     265.8    194.1   36.9%   265.8    275.4   -3.5%
 

 

Sales Commission

     430.2    503.9   -14.6%   430.2    398.4   8.0%
 

 

Bad Debt Expenses

     24.9    35.1   -29.1%   24.9    15.7   58.2%
 

 

Depreciation & Amortization

     695.6    775.3   -10.3%   695.6    857.7   -18.9%
 

 

Advertising

     40.9    26.3   55.4%   40.9    43.9   -6.8%
 

 

Repair & Maintenance

     24.4    27.8   -12.3%   24.4    55.0   -55.6%
 

 

Cost of Goods Sold

     955.6    568.0   68.2%   955.6    828.1   15.4%
 

 

  ¨ Cost of mobile handset sold

     871.5    495.3   76.0%   871.5    724.2   20.3%
 

 

  ¨ Others

     84.1    72.8   15.5%   84.1    103.9   -19.1%
 

 

Cost of Service Provided

     549.7    493.6   11.4%   549.7    574.8   -4.4%
 

 

  ¨ Cost of service

     142.0    121.0   17.4%   142.0    150.9   -5.9%
 

 

  ¨ International long distance settlement cost

     70.4    70.5   -0.1%   70.4    65.2   8.0%
 

 

  ¨ Interconnection expense

     298.0    272.9   9.2%   298.0    306.3   -2.7%
 

 

  ¨ Others

     39.2    29.2   34.6%   39.2    52.4   -25.1%
 

 

Research & Development

     58.5    44.9   30.4%   58.5    80.5   -27.3%
 

 

Activation, Installation & A/S Cost

     87.2    73.1   19.4%   87.2    97.8   -10.8%
 

 

Others

 

     210.0 

 

   214.8

 

   -2.2%

 

   210.0 

 

   224.7

 

   -6.5%

 

        4,269.6 

 

   3,916.3

 

   9.0%

 

   4,269.6 

 

   5,297.1

 

   -19.4%

 

  O Labor Expense     Declined 59.2% QoQ and 7.3% YoY because of ERP impact in 4Q09. Provision for retirement rose YoY because of voluntary retirements in the company management.
  O Commission     Fell 9.2% QoQ due to payments for completed outsourcing projects in 4Q09. Rose 5.2% YoY because of added system installation from the merger.
  O Depreciation & Amortization     Falling Capex led to shrinking depreciation charges.
  O Cost of Goods Sold     Rise in mobile subscriber gross addition and ballooning sales of expensive handsets such as Smartphones caused YoY and QoQ increase.
     
 

  ¢ Marketing Cost

 

         ‘10-1Q           ‘09-1Q           YoY           ‘10-1Q           ‘09-4Q           QoQ    
 

 

     ¨ Sales Promotion

     265.8    194.1   36.9%   265.8    275.4   -3.5%
 

 

     ¨ Sales Commission

     430.2    503.9   -14.6%   430.2    398.4   8.0%
 

 

     ¨ Advertising

     40.9    26.3   55.4%   40.9    43.9   -6.8%
 

 

        (Profits from mobile handset sold)

 

     -22.9 

 

   -158.9

 

   -85.6%

 

   -22.9 

 

   -48.7

 

   -52.9%

 

        714.1 

 

   565.4

 

   26.3%

 

   714.1 

 

   669.0

 

   6.7%

 

               
 

  ¢ Interconnection Expenses

 

         ‘10-1Q           ‘09-1Q           YoY           ‘10-1Q           ‘09-4Q           QoQ    
 

 

  O MM

     170.1    150.8   12.8%   170.1    176.8   -3.8%
 

 

  O ML

     7.2    6.4   12.2%   7.2    7.6   -5.3%
 

 

  O LM

     95.2    98.9   -3.7%   95.2    99.1   -3.9%
 

 

  O Others

 

     25.4 

 

   16.8

 

   51.3%

 

   25.4 

 

   22.8

 

   11.7%

 

        298.0 

 

   272.9

 

   9.2%

 

   298.0 

 

   306.3

 

   -2.7%

 

      * Interconnection expenses may not move proportionally to voice traffic due to difference in estimation.

 

11

F.

 

  

Non-operating

 

          ‘10-1Q        

 

   ‘09-1Q         

 

        YoY        

 

        ‘10-1Q        

 

        ‘09-4Q        

 

        QoQ        

 

 

 

   ¨ Interest Income

    

 

24.5 

  

 

37.8 

  

 

-35.2% 

  

 

24.5 

  

 

38.3 

  

 

-35.9% 

 

   ¨ Gain on foreign currency transaction

     3.1    15.1    -79.3%    3.1    5.7    -45.6% 
 

   ¨ Gain on foreign currency translation

     94.2    18.4    412.3%    94.2    55.0    71.2% 
 

   ¨ Gain on Equity Method

     23.4    19.4    20.8%    23.4    38.1    -38.6% 
 

   ¨ Gain on disposal of tangible assets

     10.6    0.5    2029.6%    10.6    1.8    488.4% 
 

   ¨ Others

     72.7 

 

   161.1 

 

   -54.9% 

 

   72.7 

 

   13.2 

 

   450.9% 

 

 

 

Non-operating Income

 

 

    

 

228.6 

 

  

 

252.2 

 

  

 

-9.4% 

 

  

 

228.6 

 

  

 

152.2 

 

  

 

50.2% 

 

 

 

   ¨ Interest Expense

    

 

135.1 

  

 

130.5 

  

 

3.5% 

  

 

135.1 

  

 

132.2 

  

 

2.2% 

 

   ¨ Loss on foreign currency transaction

     4.0    13.3    -70.1%    4.0    6.9    -42.4% 
 

   ¨ Loss on foreign currency translation

     5.7    288.1    -98.0%    5.7    -2.6    -319.0% 
 

   ¨ Loss on Equity Method

     15.9    54.2    -70.6%    15.9    10.4    53.1% 
 

   ¨ Loss on disposal of tangible assets

     21.8    17.4    25.1%    21.8    53.8    -59.5% 
 

   ¨ Others

     120.6 

 

   57.5 

 

   109.8% 

 

   120.6 

 

   35.2 

 

   242.6% 

 

 

 

Non-operating Expense

 

    

 

303.2 

 

  

 

561.1 

 

  

 

-46.0% 

 

  

 

303.2 

  

 

236.0 

  

 

28.5% 

 

O Interest Income

     Reduced cash and cash equivalents from ERP expenses and debt payments resulted in diminishing interest income.
 

O FX related accounts

     Stabilized Korean currency led to improvement in these accounts.

 

12

 3.   

Operating Highlights

 

              
                 
   

1.

 

  

Fixed-Line (‘000)

 

           ‘10-1Q    

 

       ‘09-1Q    

 

       YoY    

 

       ‘10-1Q    

 

       ‘09-4Q    

 

       QoQ    

 

                                 
  (1)  

 

Telephony

     19,586    19,972    -1.9%    19,586    19,753    -0.8% 
   

 

(PSTN)

    

 

17,614 

  

 

19,468 

  

 

-9.5% 

  

 

17,614 

  

 

18,052 

  

 

-2.4% 

   

 

Local

    

 

16,633 

  

 

18,483 

  

 

-10.0% 

  

 

16,633 

  

 

17,069 

  

 

-2.6% 

   

Group

    

 

982 

  

 

984 

  

 

-0.3% 

  

 

982 

  

 

983 

  

 

-0.1% 

     

(VoIP)

 

    

 

1,972 

 

  

 

505 

 

  

 

290.8% 

 

  

 

1,972 

 

  

 

1,701 

 

  

 

15.9% 

 

 

(2)

 

  

Broadband

 

     7,090 

 

   6,714 

 

   5.6% 

 

   7,090 

 

   6,953 

 

   2.0% 

 

 

(3)

 

  

IPTV

 

     1,312 

 

   694 

 

   88.9% 

 

   1,312 

 

   1,172 

 

   11.9% 

 

 

(4)

 

  

Nespot

 

     291 

 

   340 

 

   -14.4% 

 

   291 

 

   296 

 

   -1.7% 

 

 

(5)

 

  

WiBro

 

     311 

 

   184 

 

   69.2% 

 

   311 

 

   287 

 

   8.5% 

 

                 
   

2.

 

  

Wireless

 

           ‘10-1Q    

 

       ‘09-1Q    

 

       YoY    

 

       ‘10-1Q    

 

       ‘09-4Q    

 

       QoQ    

 

  (1)   Subscribers (‘000)                          
 

   Gross addition

 

     1,855    1,623    14.3%    1,855    1,551    19.6% 
 

   Deactivation

 

     1,503    1,440    4.4%    1,503    1,439    4.5% 
 

   Net addition

 

     352    182    93.2%    352    112    213.9% 
 

   Churn rate (%)

 

     2.9% 

 

   2.8% 

 

   1.7% 

 

   2.9% 

 

   2.7% 

 

   6.5% 

 

            15,368 

 

   14,547 

 

   5.6% 

 

   15,368 

 

   15,016 

 

   2.3% 

 

 

(2)

 

  

ARPU (won)

 

                          
 

   Monthly base fee

 

     13,398    12,600    6.3%    13,398    13,066    2.5% 
 

   Airtime charge

 

    

 

9,228 

  

 

9,481 

  

 

-2.7% 

  

 

9,228 

  

 

9,874 

  

 

-6.5% 

 

   VAS / others

 

    

 

1,202 

  

 

1,531 

  

 

-21.5% 

  

 

1,202 

  

 

1,332 

  

 

-9.8% 

 

   Data

    

 

7,399 

  

 

6,431 

  

 

15.1% 

  

 

7,399 

  

 

7,218 

  

 

2.5% 

 

   Interconnection revenue

 

    

 

4,734 

 

  

 

4,627 

 

  

 

2.3% 

 

  

 

4,734 

 

  

 

4,859 

 

  

 

-2.6% 

 

 

 

   Excluding interconnection

     31,227    30,042    3.9%    31,227    31,490    -0.8% 
 

   Including interconnection

 

    

 

35,961 

 

  

 

34,669 

 

  

 

3.7% 

 

  

 

35,961 

 

  

 

36,349 

 

  

 

-1.1% 

 

* Wireless ARPU was calculated based on revenue from the “Guidance” material, excluding activation fee.

 

13