KT Corp (NYSE:KT) Q1 2020 Earnings Conference Call - Final Transcript

May 13, 2020 • 02:00 am ET

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KT Corp (NYSE:KT) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

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

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

Executive
Seung-Hoon Chi

[Foreign Speech]

Good afternoon. I'm Seung-Hoon Chi, KT's IRO. Let us now begin KT's 2020 Q1 earnings presentation. This earnings release call is being webcasted via our website and you can refer to the presentation slides as you listen in on the call.

[Foreign Speech]

Please note that today's earnings results include pre-audited financial earnings and business results estimates prepared using the K-IFRS standards. Thus, we cannot guarantee the accuracy and completeness of all financial and business performance data other than the fixed past data and note that they may change in the future.

[Foreign Speech]

We will begin with CFO, Kyung-Keun Yoon's opening remarks, followed by 2020 Q1 earnings presentation.

Executive
Kyung-Keun Yoon

[Foreign Speech]

Good afternoon. I am KT's CFO Kyung-Keun Yoon. Despite the difficult business environment, including COVID-19 in the first quarter, it has been a meaningful time, holding [Phonetic] a new Board with new CEO taking office and stable transition of the management amid support for investors and analysts.

[Foreign Speech]

In today's ICT market, which includes telecommunications, 5G is becoming the mainstream. All industries are accelerating the pace of digital transformation, and we are experiencing great changes in our daily life since the outbreak of COVID-19, which includes the greater adoption of the untapped culture.

[Foreign Speech]

With the new management structure in place from the beginning of this year and in tandem with such social changes, KT has created the AI/DX organization and strengthened its B2B organization. The field organization has also transitioned to the regional HQ system in order to quickly respond to various customer needs.

[Foreign Speech]

Reflecting these changes, KT has decided to change how we present our revenue categories from this year. While the revenue structure in the past was driven by key B2C core businesses, including wireless, fixed line and media, starting from 2020, we have two main categories: B2C and B2B.

[Foreign Speech]

The new B2B revenue has three business areas; traditional corporate lease line, corporate IT solution, which includes SI business and AI/DX, which includes IDC and cloud business.

[Foreign Speech]

The product revenue has also been simplified by excluding the SI business to represent only the handset revenue. Moreover, we have separated the earnings performance of KT and its affiliated group companies to more clearly present the performances of individual group companies.

[Foreign Speech]

We expect to further raise your understanding of the KT group with the realignment of the revenue categories.

[Foreign Speech]

Let me now