Good afternoon. I am Seung-Hoon Chi, IRO of KT. I would like to begin KT's 2022 Q1 earnings presentation. For your information, this earnings release call is being webcast live on our website, and you can follow the slides as you listen to the call. Before we begin, please note that today's presentation includes estimates of financial and operating results, which have been prepared in accordance to K-IFRS standards that have not yet been reviewed by an outside director, an outside auditor. Therefore, other than confirmed historical data, we cannot guarantee the accuracy and completeness of financial and business information. Please be reminded that these figures are subject to change. With that, I would now like to invite our CFO, Mr. Young-Jin Kim, for his remarks and presentation on the business performance of KT in the first quarter of 2022.

Good afternoon. I am Young-Jin Kim, CFO of KT. I will first go over the key performance highlights for the first quarter of 2022. In the first quarter of 2022, operating revenue grew 4.1% Y-o-Y and stood at KRW6,277.7 billion. Thanks to the full-fledged business expansion of the DIGICO B2B business as a digital platform company. The continued robust growth of the Telco business and a stronger growth portfolio, driven by partnerships and co-operation. The 6.4% Y-o-Y revenue growth of the service revenue was especially notable. Operating income jumped 41.1% Y-o-Y to reach KRW626.6 billion, supported by revenue growth driven by DIGICO and efficient cost control. Even on a standalone basis, revenue increased by 0.7% Y-o-Y to report KRW4,608.4 billion and operating income grew by 17.5% Y-o-Y to reach KRW429.9 billion KT is successfully achieving the DIGICO success formula by leading Korea's digital transformation or DX demand and actively cooperating and partnering with Korea's #1 business operators to secure growth momentum. For B2B, KT offers customized services to different industries based on Korea's largest mobile and fixed infrastructure, strength in core DX technologies such as AI, big data and cloud, and our diverse corporate product portfolio, which led to a 10.5% Y-o-Y growth for DIGICO B2B and a 7.1% Y-o-Y growth for the Telco B2B business. In particular, in Q1, we were able to win orders not only in finance and the public sector, but also in the distribution industry, expanding our reference. A total of 0.9 trillion orders were booked, which is a 59% jump Y-o-Y. The revenue of the cloud and IDC business, the key to digital transformation grew by 14.7% Y-o-Y to continue strong momentum, mainly propelled by the increased sales to large global content providers, KT's preemptive response to new demand and increased demand from the…

[Operator Instructions] The first question will be presented by Hoi Jae Kim from Daishin Securities.

My name is Kim Hoi-Jae from Daishin Securities. I have 2 questions. First is related to dividends. I understand that the dividend policy is 50% of ordinary income and profit, and it excludes one-off items. So the dividend is related to the earnings of the company and like this year when the earnings are very strong, I believe that we can expect higher dividend for the full year. But I also understand that this policy is only valid for this year. Will the dividend policy continue next year as well and will the dividend be continued to lead to the earnings of the company? Second is related to content. I understand that original title has been launched by StudioGenie this year. What is the lineup of the content titles this year? What is the time slot for those titles? And also, if possible, can you also provide some guidance on the profitability of the content business?

Thank you for the question. Your first question was regarding to the dividend policy after next year. I will answer that question first. As you know, for the dividend payout for 2022, it will be 50% of net – adjusted net income on a standalone basis and this policy will be maintained until the end of 2022. I think it is a little bit early to communicate the shareholder return policy for 2023. Having said that, historically, KT’s dividend payout has been around 50%. The senior management and the Board of Directors of the company have been continuously working to enhance the corporate value and shareholder return policy and have been continuously supporting shareholder returns. And for the dividend policy after 2023, the Board of Directors will be discussing this topic and we will be considering the expectations and the opinions of shareholders and investors to come up with a policy that can meet the expectations of the market. Your second question was regarding StudioGenie, the lineup for this year and the guidance for the performance for this year. For content lineup this year, we are planning to have around more than 10 titles and from next year onwards, we should have more than 20 titles released a year. We recently released the original title, There is No Goo Pil-Soo, which has been receiving positive reviews and the viewership for the drama is increasing as well. After that, we have Strange Lawyer, Woo Young Woo and also My Secret Partner, that is coming up in the lineup. These dramas are based on already verified content like Webtoons, so we will be continuously working to enhance the quality of the titles that we release. We already have a confirmed slate [foreign] up to next year, but I don’t think that this is the appropriate event to go over each of those titles that are expected to be released. For the guidance for the performance, of course, in 2022, with strong lineups, we will be generating higher revenue. As for the operating income, we believe that it will turn to profit this year and we will be continuously working to enhance the value of the company and we are also thinking of listing IPO of the company in the future as well. Next question, please.

The next question will be presented by Joonsop Kim from KB Securities.

My name is Kim Joonsop from KB Securities. First of all, congratulations on the very strong results in the first quarter. I have 2 questions, one on AI/New Biz and the other on IDC/Cloud. First on AI/New Biz, in the previous call, you mentioned the launch of AICC, and AICC has been receiving attention and making headlines on the press. So I would like to understand better your growth strategy for this business, your outlook and guidance for the performance, and if there is anything that has changed regarding the AICC since the previous call, it will be also appreciated if you can share that as well. The second question is related to IDC and Cloud. There are more competitors entering the market and therefore, the supply for this service will increase as well. What is your strategy to sustain growth in this area?

Thank you for the questions. I will first answer the question regarding the AICC and AI/New Biz. First of all, if you look at the backdrop of the AICC business, KT has the experience of operating the largest customer centers in Korea and based on this experience, we were able to automate the service by using that data to input our AI capabilities. So this is the backdrop for this AICC service. To go into a little bit more detail, AICC combines the contact center – call center experience with KT’s AI capabilities. We are able to offer virtual consultations with customers and analyze the different cases to come up with solutions and provide these solutions in the form of packages that can best suit the needs of the customer. We can combine the Telephony’s the messaging, the chatting services and integrate all of this into a single platform to enhance customer experience for our customers. Yes. We believe that the contact – CC market size is around KRW9 trillion and our portion of this market, the AICC portion is continuously increasing. We have largely 3 strategic directions for AICC. First, as an infrastructure business, we have been focusing on finance and insurance in the past, but we are expanding our presence into the public sector and also the distribution industry as well. We are also planning to launch and operate the subscription business in this sector for small and medium sized enterprises. We will be combining the AI and the Cloud of KT services to create what we called CcaaS and this will help us diversify our business model and secure a larger number of SMEs as our clients. We have also launched the AI voice secretary and this has been targeting the smaller mom-and-pop stores and small SMEs.…

The next question will be presented by Jae-Min Ahn from NH Investment & Securities.

My name is Ahn Jae-Min from NH Investment & Securities. First of all, congratulations and thank you for the very outstanding results in the first quarter. I have a question regarding the marketing expense for the wireless business. We see the marketing expense has stabilized in Q1 and I largely believe that this trend will continue in Q2. But usually in the past, if the expense was higher in the first half -- sorry, if the expense was lower in the first half, it tends to be higher in the second half. Also, the second half is when the major device makers launch their flagship handsets. So in relation to that, I would like to understand your outlook for marketing expense for the year for this wireless business.

Thank you for your question. And your question was on the marketing expense for the full year. Yes. The – one of the reasons why the marketing expense showed stabilizing trend in Q1 was because the total volume of new wireless openings has declined and there has been some reduction in the amortization and depreciation related to that as well. So, as for the outlook for the marketing expense for the full year 2022, in light of the market competition and our efforts to efficiently manage cost, we will be working to maintain or slightly reduce the marketing expense compared to the previous year. Like you mentioned, there can be some flagship device releases in the second half, also the pandemic is coming to an end that can result in higher volume, and there can be some marketing targeting the new premium customers. But overall, we plan to make utmost effort to maintain or limit the growth of marketing expense to be similar or slightly less than last year in light of efforts to stabilize the market overall and also our efforts to execute cost in an efficient manner.

Currently, there are no participants with questions. We will wait for a second until there is another question.

If there are no more questions, we will conclude the Q&A session. Thank you for your questions and interest in KT. Thank you once again for attending today's earnings call despite your busy schedule. We will conclude the earnings call of KT for the first quarter of 2022.