[Foreign Language] Good morning and good evening. Thank you all for joining this conference call. Now we will begin the conference of the Fiscal Year 2024 First Quarter Earnings Results by KT. We would like to have welcoming remarks from KT IRO. And the CFO will present earnings results and entertain your questions. This conference will start with our presentation followed by a Q&A session. [Operator Instructions] Now we would like to turn the conference over to KT IRO

[Foreign Language] Good morning. I'm KT's IRO, Young-Yoon Yun., we will commence KT's first quarter 2024 earnings presentation. This earnings release call is being webcast live on our website and you can make use of the presentation slides as you listen in on the call. Please be reminded that today's presentation includes financial estimates and operating results under the K-IFRS standards, which are yet to be reviewed by an outside auditor. We hence cannot ensure accuracy nor completeness of financial and business data aside from historical actuals. So we ask that you note that these figures may be subject to changes. With that I invite our CFO, Min Jang for his welcoming message and presentation on Q1 2024 earnings.

[Foreign Language] Good morning. I'm Min Jang, KT's CFO. At the Mobile World Congress 2024 held last February, KT announced its vision to make believe and transform into an AI CT company. By combining AI and IT with our CT capabilities we will seek to reinforce our core competitiveness and explore new business opportunities powered by AI. We will be steadfast at finding sustainable growth engine for the future by way of innovation and rationalization of our business structure that is based on AX short for AI-driven DX. With that said let's go into the details of KT's Q1 highlights. Supported by well-balanced growth from B2C and B2B businesses on top of growth momentum from the group's core business portfolio which include IDC and cloud, KT's consolidated revenue reported KRW 6,654.6 billion and separate basis revenue was at KRW 4,694.8 billion, both reporting growth versus last year. Separate basis operating profit was up 1.5% year-on-year, coming in at KRW 393.8 billion, driven by revenue growth and efficient marketing activities. Consolidated operating profit increased 4.2% year-on-year to KRW 506.5 billion at the back of profit growth from major subsidiaries, including BC Card, KT Cloud, KT Estate, among others. On April 30, KT announced cash dividend of KRW 501 per share for the first quarter making quarterly dividend payment for the first time since the beginning of the company. Following that, KT's Board of Directors made the decision on May 9 to cancel 2% out of the 4.41% of treasury shares owned by the company. KT will continue to do what it can to enhance corporate value by strengthening shareholder return underpinned by profit growth. Now moving on to the earnings of the first quarter of 2024. Operating revenue increased 3.3% year-over-year to KRW 6,654.6 billion. Despite there being rise in business…

For more information please refer to the earnings presentation that we circulated previously and we will now entertain your questions. To allow as many questions as possible, we would like to ask that you please limit your questions to two per person.

[Foreign Language] Now, Q&A session will begin. [Operator Instructions] The first question will be presented by Soojin Kim from Mirae Securities. Please go ahead with your question.

[Foreign Language] Good morning. I would like to ask you two questions. First is that this quarter we've seen a double-digit growth from KT Cloud. Would like to understand as to what are the key drivers behind the sustained growth of your KT Cloud business. And this year it is expected that because of the economic slump that we are currently facing companies IT expenditure is going to be quite conservative is what we are thinking at this point. So, what is your annual outlook for your KT Cloud business? Second question is back in February you announced that you will be hiring about 1000 IT employees. What impact will that have on your annual labor cost?

[Foreign Language] Yes, responding to your first question on KT Cloud. If you look at our first quarter numbers we've seen an IDC business grow underpinned by our colocation and DMO businesses. Now, the global clients or customers including AWS Microsoft and Google have started to use our colocation services. And I can tell you that that had worked as a quite strong driver behind our performance. In 2024, our objective is yet again to further grow our revenue and operating profit and our plan for revenue growth is at about 26% and forward profit 51% growth. Second question, the impact of hiring 1000 IT personnel and on the labor cost line item it will be in the tune of KRW 20 billion to KRW 30 billion. As you are aware going forward for about five to six years to come we will have about 1000 people on a per year basis retire from the company. So all in all we do not expect that there will be any significant labor cost impact. Yes, we will have about 700 people leaving the company due to their retirement. Next question please.

The following question will be presented by Jisoo Jeong from Meritz Securities. Please go ahead with your question.

I am Jeong Jisoo from Meritz Securities. Thank you very much for taking my question. I have two questions. The first one is what is KT's overall approach to your AI strategy going forward? And you've made the decision to pay out quarterly dividend of KRW 500 per share. Does that mean that we can expect on a per annum basis about KRW 2000 per share? And also if you could provide – if you can also provide some color with regards to any additional shareholder return plans that you have in place.

Yes, I will first respond to your question about the details of our AI strategy. If I share with you our mid-term strategy first, we actually have three different areas that we are focusing on to become eventually an AICT company. Now the first pillar is bringing AI together with our IT capabilities and strengthening our core competitiveness. A good example that I could cite is by incorporating AI capabilities in our CS centers. What we can do is we can reduce the time spend on counseling our customers and automate certain processes. Second pillar will be exploring and identifying new business opportunities by applying AI capabilities into our existing IT business and data cloud business. Now on this area, we are planning on developing services and models that are specialized for certain verticals like the financial vertical, the public sector and also the other sectors and verticals within different industries. We will also be developing a business process specific or dedicated solutions and models for instance like for the use of CRMs, ERPs and SCMs. Last but not least is applying AI capabilities on media and platform business, which will help us innovate the platform powered by AI. One of the example is that at this point, we are studying and developing a different UX and UIs that will be more convenient for our user base by studying and looking into various different viewing patterns especially of our user base for the media services. Second, on dividend. We have paid down KRW 500 per share as a quarterly dividend payout. And yes, there would need to be a resolution and decision made at the BOD level, but we will make sure that we do not fall short of the expectations of the market in conducting the quarterly dividend. Regarding additional shareholder returns, as we've done today, as you know, we've canceled some -- we have canceled the treasury shares that we were holding. Going forward, we'll continue to resort to various different ways to make sure that we expand on the shareholder return. Next question, please.

[Foreign Language] The following question will be presented by Joonsop Kim from KB Securities. Please go ahead with your question.

[Foreign Language] Thank you for taking my question. I'm from KB Securities. I just have one question. I see that your growth that you're seeing from the B2B services business is quite salient compared to the past? Are there any special, I guess, trends or aspects that we need to be mindful of in terms of the types of projects you're winning or the size?

[Foreign Language] I will respond to that question about the earnings that we're getting from our B2B services and our direction forward. In our B2B services, we've seen a solid growth from our Internet broadband business and data. I did mention this when I answered the question about AICT, but we are also bringing in AI capabilities into the realm of IT in driving up the performance of our B2B services. Now having said that, the approach that we are taking for the B2B services market is that compared to the past, we are focused more on driving good profit and really focusing on projects that we can win that will provide us with a more fundamental boost and will give us more visibility in terms of the returns on the performance that we gain. I said previously that there was a year-over-year growth of 5.6%, and we will continue to endeavor to make sure that we drive tangible results.

[Foreign Language] I see that there are no other questions waiting in the queue. So this brings us to the end of the first quarter 2024 earnings call of KT. Once again, thank you very much for joining us despite your busy schedule. Thank you very much for your continued interest and support.