KT Corp (NYSE:KT) Q3 2018 Earnings Conference Call - Final Transcript
Nov 02, 2018 • 02:00 am ET
second quarter of this year. Cost of services provided increased to 12.5% versus last year due to an increase in content's costs such as IPTV, PPV revenue. Marketing expenses decreased 0.4% Y-o-Y and selling expenses declined slightly as the market stabilizes.
On the next page, let me explain the financial position.
The financial position will now be discussed based on the new accounting standards. As of the end third quarter, the debt to equity ratio is 124.1% and net debt to equity ratio is 25.1%.
Next, let me discuss capex.
Capex, third quarter year-to-date totaled KRW1,108.3 billion which represents roughly 48.2% against the yearly guidance of around KRW2.3 trillion.
Now let me move on to each of the business lines.
Total wireless revenue decreased 2.1% year-on-year to total KRW1,778.6 billion. Wireless service revenue was down 2.5% year-on-year to KRW1,657.4 billion on higher take up of selective rate discount plans and tariff cuts to the vulnerable. In addition, due to stronger sales volume of second devices and the impact of the customer benefit enhanced DataON rate plan, wireless subscribers recorded 20.92 million showing a net addition of 260,000 versus the second quarter.
Next is the wire line business.
Underlying revenues declined 1.5% year-over-year to KRW1,200 billion as the decline in both fixed line telephonic subscribers and usage volume continued. However, the broadband business grew 1.9% year-on-year driven by an increase in giga Internet subscribers even though interconnection rates declined. Third quarter GiGA Internet net additions totaled approximately 220,000 making the total 4.7 million subscribers, which stands for 54% of all Internet subscribers.
Next is on the media contents business.
Total media contents revenue was up 9.2% year-on-year at KRW625.3 billion. Media revenue grew 8% year-on-year as the IPTV business expanded its subscriber base with net additions of over 100,000 per three consecutive quarters. Contents revenue was up by 14.2% versus last year due to revenue growth of KTH's T-commerce.
Lastly, let me discuss the finance and other services.
Finance revenue grew 1% year-on-year to KRW882.3 billion due to an increase in acquiring volume at BC Card. Other service revenue grew 15.2% year-on-year to KRW652 billion from stable revenue generated from the real estate and Internet data center business.
For other details please refer to the presentation material. And now we will start the Q&A session.