KII Liquidating, Inc. Q1 FY2024 earnings call

• Announced vision to become an AI CT company at MWC 2024, combining AI/IT with CT capabilities.
• Consolidated revenue at KRW 6,654.6 billion and separate basis revenue at KRW 4,694.8 billion, both showing growth.
• Separate basis operating profit up 1.5% to KRW 393.8 billion; consolidated operating profit up 4.2% to KRW 506.5 billion.
• Paid KRW 501 cash dividend per share and canceled 2% of treasury shares.
• AI strategy pillars: Strengthen core competitiveness via AI in CS centers; explore new business opportunities with AI in IT/data cloud; innovate media/platform with AI for better UX/UI.
• B2B services growth with AI integration to cater to AX demand across industries.

Wireless: Revenue up 1.7% year-on-year to KRW 1,736.5 billion; 5G subscribers exceed 9.95 million, accounting for over 74% of total handset subscribers. Fixed-line business: Broadband Internet revenue grew 2.1% to KRW 620.8 billion; Media business posted 2.3% year-on-year growth; Home telephony revenue declined 5.7% to KRW 183 billion. B2B services: Revenue increased 5% year-on-year driven by enterprise broadband Internet, data business, and AX services; five major growth drivers saw 4.9% year-on-year growth. Subsidiaries: BC Card revenue down 1.8% to KRW 935.6 billion; Skylife revenue flat at KRW 254.4 billion; KT Genie Studio down 2.8%; KT Cloud revenue up 17.8% due to IDC growth; KT Estate revenue up 20.3%.

• KT Cloud aims for 26% revenue growth and 51% operating profit growth in 2024.
• Hiring 1000 IT employees expected to impact labor cost by KRW 20-30 billion, offset by ~700 retirements over 5-6 years, so no significant labor cost impact.
• Plan to continue various shareholder return measures, including treasury share cancellations.

• Economic slump impacted BC Card's acquiring volume, leading to 1.8% year-on-year revenue decline.

Q: What are the key drivers behind KT Cloud's sustained growth and its annual outlook?

A: IDC business growth from colocation and DMO, supported by global clients like AWS, Microsoft, and Google; 2024 revenue growth target ~26% and operating profit growth ~51%.

Q: Impact of hiring 1000 IT employees on labor cost?

A: Labor cost impact ~KRW 20-30 billion, but offset by ~700 retirements over 5-6 years, so no significant impact.

Q: KT's overall approach to AI strategy?

A: Three pillars - strengthen core competitiveness with AI in CS centers; explore new business opportunities with AI in IT/data cloud; innovate media/platform with AI for better UX/UI.

Q: Dividend and additional shareholder return plans?

A: Paid KRW 500 per share quarterly dividend, plan to continue various shareholder return measures including treasury share cancellations.

Q: Trends in B2B services projects?

A: Focus on driving profitable projects with AI integration to provide tangible results and better visibility in returns.