KII Liquidating, Inc. Q4 FY2023 earnings call

Organizational Changes

• IRO and CFO changes within KT.

Financial Performance 2023

• Consolidated revenue KRW26,387 billion, standalone revenue KRW18,371.4 billion; standalone operating income up 1.5% Y-o-Y to KRW1,185.4 billion, consolidated operating income down 2.4% Y-o-Y to KRW1,649.8 billion but up 2.1% excluding one-off profit.

Shareholder Return

• 50% of standalone adjusted net income for dividends, cash dividend per share KRW1,961, KRW27.1 billion buyback program; total shareholder return per share in 2023 KRW2,071 (+5.6% Y-o-Y).

Business Strategy 2024

• Strengthen AI-driven DX capabilities, innovate pricing/distribution in B2C, improve B2B business structure, focus on key B2B growth areas (AICC, IoT, smart mobility, smart space, energy), and unveiled Mi:Dm large AI service.

Consolidated revenue was KRW26,387 billion and standalone revenue was KRW18,371.4 billion, both with Y-o-Y growth. Wireless revenue rose 2.3% Y-o-Y to KRW6,869.6 billion, with 5G penetration surpassing 73% (9.83 million subscribers). Broadband revenue in fixed line business rose 2.8% Y-o-Y to KRW2,460 billion, while home telephony revenue declined 7.6% Y-o-Y to KRW754.1 billion. Media business grew 2.3% Y-o-Y. B2B service revenue grew 2% Y-o-Y, with key growth businesses (AICC, IoT, smart mobility, smart space, energy) showing 2.4% Y-o-Y growth. Subsidiaries: BC Card had KRW4,025 billion revenue (+3.3% Y-o-Y), Skylife KRW1,038.7 billion (similar to prior year), Content Subsidiary KRW687 billion (+5.6% Y-o-Y), KT Estate KRW594.5 billion (+21.8% Y-o-Y), and KT Cloud had double-digit Y-o-Y growth.

Goals

• Aim to surpass KRW27 trillion in consolidated revenue and KRW16 trillion in standalone service revenue in 2024.

Strategies

• Strengthen growth potential of telco business via AI DX and business innovation; innovate B2C pricing/distribution/products; improve B2B business structure, core businesses, and IT innovation; strengthen competitiveness in AI DX market key areas.

Risks

• Global uncertainty in business environment at home and abroad.
• Softening growth potential of B2C telco market.
• Potential challenges in B2B growth slowing down.

Q: Regarding shareholder return policy and B2B strategy A: KT's midterm policy includes KRW1,961 cash dividend per share and KRW27.1 billion share buyback; resources for shareholder return include ~KRW110 billion from subsidiaries. For B2B, focuses on nationwide infrastructure, platform building, and service innovation.

Q: About key growth areas and online plans A: Details on AICC, IoT, etc., with efforts to secure references; early response to online direct plan launched in January is being closely monitored, aiming to expand 5G subscriber base Q: On wireless business outlook and restructuring A: Outlook on 5G penetration with plans to reach 80% this year via diverse products and distribution; no concrete decisions yet on restructuring telecom and M-mobile