[Foreign Language] Good morning and good evening. Thank you all for joining this conference call. And now we will begin the conference of our 2023 Second Quarter Earnings Results by KT. We would like to have welcoming remarks from Mr. Seung-Hoon Chi, KT IRO; and Young-Jin Kim, the CFO, will present earnings results and entertain your questions. This conference will start with the presentation followed by a Q&A session. [Operator Instructions] Now, I would like to turn the conference over to Mr. Seung-Hoon Chi, KT, IRO.

[Foreign Language] [Interpreted] Good afternoon. I am Chi Seung-Hoon, KT's IRO. Let's begin KT's second quarter 2023 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 in on the call. Before we begin, please note that today's presentation includes financial statements and operating results under the K-IFRS standards that have not yet been reviewed by an outside auditor. As we cannot ensure accuracy and completeness of financial and business data, aside from the historical performance, please be reminded that these figures may be subject to change. With that, I will now invite our CFO, Kim Young Jin for his remarks and presentation on the second quarter earnings results.

[Foreign Language] [Interpreted] Good afternoon. I am Kim Young Jin, KT's CFO. I will begin with key earnings highlights for the second quarter of 2023. Supported by KT's solid fundamentals in B2C and B2B and robust growth from group's core portfolio, including finance, real estate, media content and DX businesses, second quarter consolidated and stand-alone operating profit both recorded a double-digit growth. Despite rise in business expenses on higher inflation, earnings outperformed market expectations on the back of cost efficiency gained from improvement in business implementation, such as strengthening of distribution and improving outsourcing structure, which bolstered profitability. Second quarter stand-alone service revenue, hence, was KRW4,018.6 billion and operating profit recorded KRW407.5 billion. Each posted a growth of 2.1% and 34.2% year-over-year, respectively. And since 2010 for the first time in 13 years, quarterly service revenue reached KRW4 trillion level. Consolidated revenue recorded KRW6,547.5 billion, while operating profit was KRW576.1 billion, up 3.7% and 25.5% year-over-year, respectively. And KT's BoD made the decision to appoint Kim Young-shub as the new CEO of the company on August 4. The incoming CEO will be officially appointed after the approval of shareholders during the second Extraordinary General Meeting of Shareholders to be held on August 30. By removing governance-related uncertainties and based on solid fundamentals, KT will continue to strive towards corporate value enhancement in the second half of the year. I will now move on to earnings for second quarter of '23. Operating revenue was KRW6,547.5 billion, up 3.7% on-year. Operating profit came in at KRW576.1 billion, up 25.5% year-over-year on the back of stronger profitability, which is an outcome of better cost efficiencies following improvement on structure for business implementation. Net profit was up 19% year-on-year, recording KRW432.5 billion, while EBITDA increased 8.5% on-year, reaching KRW1,505.3 billion. To the next page,…

[Foreign Language] [Interpreted] Now for more information, please refer to the previously circulated presentation material. We will now move into Q&A session. Due to the time constraint, I would like to ask that you limit your questions to two per person.

[Foreign Language] [Operator Instructions] The first question will be presented by Hoi Jae Kim from Daishin Securities. Please go ahead with your question.

[Foreign Language] [Interpreted] Thank you. I am Kim Hoi-Jae from Daishin Securities. I have two questions. I want to ask regarding your earnings results. First has to do with your top-line revenue, and second question relates to your cost. First, if we look at your second quarter earnings performance, it really outperformed market expectations. Is there any key drivers, maybe two or three key elements that you wish to highlight with regards to the background to this earnings result? And also, if you could provide some color as to what the second half outlook is from the perspective of the company, that would be helpful. Second question is on cost. High level of inflationary pressure seems to work as a burden on many companies, but it seems KT was able to really control its cost quite well. I would like to understand as to what were the efforts that you put in to control such -- to do cost control? And so that would be helpful if you could shed light on that aspect.

[Foreign Language] [Interpreted] Thank you, Mr. Kim, for asking two questions. You asked about the key performance regarding the revenue -- top-line revenue, what were the key drivers and what our outlook is for the second half of the year as well as cost. So, why don't I combine all of that and provide you with an answer. On the revenue side, I think we could highlight three key elements. So, the first element has to do with B2C business. We were able to drive quite steady performance because we focused on improving the quality aspect, especially quality sales activities with regards to our mobile Internet and TV business. The second element has to do with our B2B business. The projects that we have already won in the past, we are starting to see monetization. We see revenue stream coming through. And in the first half of the year, we also saw growth in the number of orders that we were able to book. So, the new order expansion also was a key driver behind our B2B business growth. Third key driver behind the performance was from our subsidiaries. Our core portfolio of businesses, which includes finance, real estate, media and content, cloud and IDC, these areas were -- have been able to bring about growth. So, in the same light, we were endeavor to continue to bring on growth from our B2C and B2B businesses, as well as from the businesses that's part of our core group portfolio of businesses. So based upon these endeavors, we want to be able to bring about additional growth from the KT Group perspective. Now, as you've pointed out, I believe inflationary pressure does work as a cost burden for most of the companies. KT is not an exception to that. The increases…

[Foreign Language] [Interpreted] We'll take the next question, please.

[Foreign Language] The next question will be presented Sean Lee from Citigroup. Please go ahead with your question.

[Foreign Language] [Interpreted] Thank you for taking my question. I would also like to ask two questions. You announced last Friday that you -- the company has selected the final candidate for the new incoming CEO. Can you shed some light as to the background of appointing the new CEO? Also, does the company have a plan to have a communication session with the investors so that he -- the new incoming CEO can explain and elaborate on the business plan that he is currently envisioning? And if so, when will that timing be? Second question has to do with your dividend plan. Your first half net profit is quite good, attractive. I would like to understand under the new executives of the company, would you be able to continue on with the dividend plan that the KT was able to stick to over the years?

[Foreign Language] [Interpreted] Thank you, Mr. Lee, for your question. Yes, allow me to first tackle your first question regarding the CEO candidate, the background under which he was appointed, the business plan that he would be envisioning and also any plans that we have to hold a session with him and the investors. So, as you would already appreciate, KT's Director Candidate Recommendation Committee has selected a total of three potential candidates and went through a very in-depth interview and have decided and selected the one final candidate to be the CEO of the company. And hence, the BoD on the August 4 have decided on Young-shub Kim, the former LG CNS President to be the new incoming CEO of KT. We will go through an EGM at the end of August to gain approval from our shareholders. Just to elaborate a little more, maybe the BoD has determined that he would be the best fit and the right person to make KT into a global digital platform-based company in light of his extensive corporate business management experiences and his expertise in ICT and digital transformation and his focus on fundamental-centric growth and innovation. Also to note, the incoming CEO, Young-shub Kim is a finance expert. He served as the CFO of LG Plus and LG CNS, and he was a CEO that served as the CEO of LG CNS for the longest term and he is a person that is well equipped with ICT and business management expertise. And also the incoming CEO, when he was serving as the CEO of LG CNS, he was also the Director of Business unit. I think BoD, through the very in-depth interviews, was able to identify that he was capable as a person equipped with ICT expertise, as a person who…

[Foreign Language] [Interpreted] Next question, please.

[Foreign Language] The next question will be presented by Aram Kim from Shinhan Securities. Please go ahead with your question.

[Foreign Language] [Interpreted] Thank you for taking my question. I also would like to ask you two questions. First, for this quarter, I see that your subsidiary contribution has been quite significant. Can you elaborate a little more on the background to this? Was it the case that during first quarter, the revenue profile wasn't as good, and then in Q2, you've seen an improvement? Is that what would explain this high level of contribution? Or what do you think is the just a business as usual or normal level of profit contribution coming in from your group of subsidiaries? Second question is a question on your AI business. What is the direction that the company is envisioning for this business? And do you have specific services where you are actually generating revenue from such AI services? If so, can you tell us as to what they are?

[Foreign Language] [Interpreted] Well, thank you very much, Ms. Kim Aram, for your questions. I will first respond to your question about our subsidiaries' contribution. So, regarding the subsidiary contribution, on top of a very well-balanced growth that we are seeing from B2C and B2B business areas on a KT stand-alone basis, we have seen additional growth engine and momentum being formed from KT Group's other businesses or subsidiary businesses, including finance, content, DX and real estate. Out of all the subsidiaries, our two subsidiaries, namely BC Card and KT Estate, had made the biggest profit contribution. So, if you first take a look at our BC Card business, it is our core and key subsidiary out of KT's group financial business and especially the acquiring business, which is a cash cow, was able to really bring about steady income revenue stream. And through the lending business, we were able to expand on our financial assets. So, as such, the company has been putting in efforts to diversify the revenue source. And also through branded BC Cards, we are able to drive transaction volume increase coming from B2C customers and also on the B2B segment as well by extending merchant loans and corporate loans, we are able to further broaden our basis for growth. So, our plan is to, through BC Card, be able to strike a very good balance between the existing business as well as new business forays so that we can continue to grow the revenue as well as profit contribution. Now, moving on to KT Estate, it's in the business of hotels, offices, rental, housings. And out of this business, there was a revenue stream coming in from apartment sales project that was ongoing at the [Gwangju] (ph) city. Also this year, with the end of…

[Foreign Language] [Interpreted] Are there any questions?

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

[Foreign Language] [Interpreted] With no further questions, we would now like to close our Q&A session. Thank you very much for all the questions that you asked as well as the interest that you've shown us. Once again, thank you for joining us despite your very busy schedules. This brings us to the end of KT's second quarter 2023 earnings presentation. Thank you.