Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2024

Commission File Number 1-14926

KT Corporation

(Translation of registrant’s name into English)

90, Buljeong-ro,

Bundang-gu, Seongnam-si,

Gyeonggi-do,

Korea

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒ Form 40-F ☐

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Dated: August 26, 2024
KT Corporation

By:		/s/ Youngkyoon Yun
Name:		Youngkyoon Yun
Title:		Vice President

By:		/s/ Sanghyun Cho
Name:		Sanghyun Cho
Title:		Director

KT Corporation and Its Subsidiaries

Consolidated Interim Financial Statements

June 30, 2024 and 2023, and December 31, 2023

ATTACHMENT: INDEPENDENT AUDITOR’S REVIEW REPORT

KT Corporation and Its Subsidiaries

Index

June 30, 2024 and 2023, and December 31, 2023


		Page(s)
Report on Review of Consolidated Interim Financial Statements		1 – 2

Consolidated Interim Financial Statements

Consolidated Interim Statements of Financial Position		3 – 4

Consolidated Interim Statements of Profit or Loss		5

Consolidated Interim Statements of Comprehensive Income		6

Consolidated Interim Statements of Changes in Equity		7 – 8

Consolidated Interim Statements of Cash Flows		9 – 10

Notes to the Consolidated Interim Financial Statements		11 – 76

Deloitte Anjin LLC

9F., One IFC,

10, Gukjegeumyung-ro,

Youngdeungpo-gu, Seoul

07326, Korea

Tel: +82 (2) 6676 1000

Fax: +82 (2) 6674 2114

www.deloitteanjin.co.kr

Independent Auditor’s Review Report

[English Translation of Independent Auditor’s Review Report Originally Issued in Korean on August 14, 2024]

To the Shareholders and the Board of Directors of KT Corporation.

Reviewed Consolidated Interim Financial Statements

We have reviewed the accompanying consolidated interim financial statements of KT Corporation and its subsidiaries (the “Group”). The consolidated interim financial statements consist of the consolidated statement of financial position as of June 30, 2024, and the related consolidated interim statements of profit or loss and comprehensive income for the three-month and six-month periods ended June 30, 2024 and 2023, and changes in equity and cash flows for the six-month periods ended June 30, 2024 and 2023, all expressed in Korean won, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Interim Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) No. 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on these consolidated interim financial statements based on our reviews.

We conducted our reviews in accordance with the Review Standards for Quarterly and Semi-annual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. A review of consolidated interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing(“KSA”) and consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

LOGO

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial statements referred to above do not present fairly, in all material respects, the financial position as of June 30, 2024, and its financial performance and its cash flows for the six-month periods ended June 2024 in accordance with K-IFRS No.1034 Interim Financial Reporting.

Other Matters

We have audited the consolidated statement of financial position as of December 31, 2023, and the related consolidated statement of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, in accordance with KSA. We expressed an unqualified opinion on those consolidated financial statements in our audit report dated March 18, 2024. The accompanying consolidated statement of financial position as of December 31, 2023, presented for comparative purposes, is not different from the audited consolidated statement of financial position above in all material respects.

LOGO

Seoul, Korea

August 14, 2024

Notice to Readers

This review report is effective as of August 14, 2024, the auditor’s review report date. Certain subsequent events or circumstances may have occurred between the auditor’s review report date and the time the auditor’s review report is read. Such events or circumstances could significantly affect the financial statements and may result in modifications to the auditor’s review report.

KT Corporation and Its Subsidiaries

Consolidated Interim Statements of Financial Position

As of June 30, 2024 and December 31, 2023


(In millions of Korean won)	Notes		June 30, 2024		December 31, 2023
Assets
Current Assets
Cash and cash equivalents		4,29	W	3,786,724	W	2,879,554
Trade and other receivables, net		4,5,29		6,881,876		7,170,289
Other financial assets		4,6,29		1,304,742		1,440,200
Current income tax assets				2,325		3,299
Inventories, net		7		964,044		912,262
Other current assets		8		2,235,470		2,112,553

Total Current Assets				15,175,181		14,518,157

Non-Current Assets
Trade and other receivables, net		4,5,29		1,379,706		1,404,168
Other financial assets		4,6,29		3,070,502		2,724,761
Property and equipment, net		9		14,591,713		14,872,079
Right-of-use assets		16		1,286,681		1,304,963
Investment properties, net		9		2,250,074		2,198,135
Intangible assets, net		9		2,266,316		2,533,861
Investments in associates and joint ventures		10		1,592,746		1,556,889
Deferred income tax assets				623,699		608,924
Net defined benefit assets		14		92,458		160,748
Other non-current assets		8		815,303		827,297

Total Non-Current Assets				27,969,198		28,191,825

Total Assets			W	43,144,379	W	42,709,982

KT Corporation and Its Subsidiaries

Consolidated Interim Statements of Financial Position

As of June 30, 2024 and December 31, 2023


(In millions of Korean won)	Notes		June 30, 2024			December 31, 2023
Liabilities
Current Liabilities
Trade and other payables		4,11,29	W	8,052,305		W	8,054,922
Borrowings		4,12,29		3,595,006			3,058,564
Other financial liabilities		4,6,29		324,832			322,099
Current income tax liabilities				316,958			236,463
Other provisions		13,15		105,854			115,209
Deferred income		19		62,500			51,537
Other current liabilities		4,8,16		1,637,760			1,308,615

Total Current Liabilities				14,095,215			13,147,409

Non-Current Liabilities
Trade and other payables		4,11,29		556,236			819,558
Borrowings		4,12,29		6,555,579			7,159,601
Other financial liabilities		4,6,29		696,966			753,739
Net defined benefit liabilities		14		73,113			63,616
Other provisions		13,15		111,420			107,014
Deferred income		19		147,972			153,563
Deferred income tax liabilities				1,053,640			994,330
Other non-current liabilities		4,8,16		872,337			950,015

Total Non-Current Liabilities				10,067,263			11,001,436

Total Liabilities				24,162,478			24,148,845

Equity Attribute to Owners of the Controlling Company
Share capital				1,564,499			1,564,499
Share premium				1,440,258			1,440,258
Retained earnings		17		14,452,660			14,494,430
Accumulated other comprehensive income				294,207			52,407
Other components of equity		18		(637,177	)		(802,418	)

				17,114,447			16,749,176
Non-Controlling Interest				1,867,454			1,811,961

Total Equity				18,981,901			18,561,137

Total Liabilities and Equity			W	43,144,379		W	42,709,982

The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.

KT Corporation and Its Subsidiaries

Consolidated Interim Statements of Profit or Loss

For the three-month and six-month periods ended June 30, 2024 and 2023


		Three-Month and Six-Month Periods Ended June 30
(In millions of Korean won, except per share amounts)	Notes	2024					2023
		Three-month			Six-month		Three-month		Six-month
Operating Revenue	19,27	W	6,546,399		W	13,200,973	W	6,547,521	W	12,991,197
Operating Expenses	20		6,052,413			12,200,487		5,971,413		11,928,984

Operating Profit	27		493,986			1,000,486		576,108		1,062,213
Other income	21		107,459			180,297		62,945		131,931
Other expenses	21		48,027			118,399		74,399		134,636
Finance income	22		218,356			468,632		126,026		299,360
Finance costs	22		212,032			452,524		148,498		375,279
Share of net profits (losses) of associates and joint ventures	10		(3,033	)		7,205		5,952		2,147

Profit before Income Tax			556,709			1,085,697		548,134		985,736
Income tax expense	23		146,168			282,153		115,635		243,609

Profit for the Period		W	410,541		W	803,544	W	432,499	W	742,127

Profit for the Period Attributable to:
Owners of the Controlling Company		W	393,025		W	768,555	W	394,533	W	691,147
Non-controlling interests			17,516			34,989		37,966		50,980
Earnings per share attributable to the equity holders of the Controlling Company during the period (in Korean won):	24
Basic earnings per share		W	1,598		W	3,122	W	1,580	W	2,734
Diluted earnings per share			1,597			3,120		1,578		2,731

The above consolidated interim statements of profit or loss should be read in conjunction with the accompanying notes.

KT Corporation and Its Subsidiaries

Consolidated Interim Statements of Comprehensive Income

For the three-month and six-month periods ended June 30, 2024 and 2023


		Three-Month and Six-Month Periods Ended June 30
(In millions of Korean won)	Notes	2024						2023
		Three-month			Six-month			Three-month			Six-month
Profit for the period		W	410,541		W	803,544		W	432,499		W	742,127

Other comprehensive income (loss)
Items that will not be reclassified to profit or loss:
Remeasurements of the net defined benefit liabilities	14		(1,251	)		(648	)		4,114			(1,296	)
Share of remeasurement gain of associates and joint ventures			(601	)		(696	)		(836	)		232
Gain on valuation of equity instruments at fair value through other comprehensive income	6		117,346			230,801			41,222			114,039
Items that are or may be subsequently reclassified to profit or loss:
Valuation gains (losses) on cash flow hedges	6		58,683			141,436			(9,247	)		47,349
Other comprehensive income from cash flow hedges reclassified to profit or loss			(66,223	)		(152,944	)		(8,388	)		(75,413	)
Share of other comprehensive income of associates and joint ventures			4,303			4,917			4,532			13,371
Exchange differences on translation of foreign operations			680			46,406			13,924			21,401

Other comprehensive income (loss) for the period, net of tax			112,937			269,272			45,321			119,683

Total comprehensive income for the period		W	523,478		W	1,072,816		W	477,820		W	861,810

Total comprehensive income for the period attributable to:
Owners of the Controlling Company		W	504,272		W	1,011,815		W	430,149		W	795,672
Non-controlling interests			19,206			61,001			47,671			66,138

The above consolidated interim statements of comprehensive income should be read in conjunction with the accompanying notes.

KT Corporation and Its Subsidiaries

Consolidated Interim Statements of Changes in Equity

For the six-month periods ended June 30, 2024 and 2023


			Attributable to owners of the Controlling Company
(In millions of Korean won)	Notes		Share capital		Share premium		Retained earnings			Accumulated other comprehensive income			Other components of equity			Total			Non controlling interest			Total Equity
Balance as of January 1, 2023			W	1,564,499	W	1,440,258	W	14,257,343		W	(77,776	)	W	(572,152	)	W	16,612,172		W	1,802,551		W	18,414,723
Comprehensive income
Profit for the period				—		—		691,147			—			—			691,147			50,980			742,127
Remeasurements of net defined benefit liabilities		14		—		—		1,291			—			—			1,291			(2,587	)		(1,296	)
Share of remeasurement of the net defined benefit liabilities of associates and joint ventures				—		—		223			—			—			223			9			232
Share of other comprehensive income of associates and joint ventures				—		—		—			10,303			—			10,303			3,068			13,371
Valuation gains (losses) on cash flow hedges		6		—		—		—			(27,888	)		—			(27,888	)		(176	)		(28,064	)
Valuation gains on financial instruments at fair value through other comprehensive income				—		—		222			113,822			—			114,044			(5	)		114,039
Exchange differences on translation of foreign operations				—		—		—			6,552			—			6,552			14,849			21,401

Total comprehensive income for the period				—		—		692,883			102,789			—			795,672			66,138			861,810

Transactions with owners
Dividends paid by the Controlling Company				—		—		(501,843	)		—			—			(501,843	)		—			(501,843	)
Dividends paid to non-controlling interest of subsidiaries				—		—		—			—			—			—			(24,441	)		(24,441	)
Change in ownership interests in subsidiaries				—		—		—			—			2,405			2,405			(7,608	)		(5,203	)
Appropriation of retained earnings related to loss on disposal of treasury stock				—		—		(44,422	)		—			44,422			—			—			—
Acquisition of treasury stock				—		—		—			—			(300,086	)		(300,086	)		—			(300,086	)
Others				—		—		—			—			7,029			7,029			1,751			8,780

Subtotal				—		—		(546,265	)		—			(246,230	)		(792,495	)		(30,298	)		(822,793	)

Balance as at June 30, 2023			W	1,564,499	W	1,440,258	W	14,403,961		W	25,013		W	(818,382	)	W	16,615,349		W	1,838,391		W	18,453,740

KT Corporation and Its Subsidiaries

Interim Consolidated Statements of Changes in Equity

For the six-month periods ended June 30, 2024 and 2023


			Attributable to owners of the Controlling Company
(In millions of Korean won)	Notes		Share capital		Share premium		Retained earnings			Accumulated other comprehensive income			Other components of equity			Total			Non controlling interest			Total Equity
Balance as of January 1, 2024			W	1,564,499	W	1,440,258	W	14,494,430		W	52,407		W	(802,418	)	W	16,749,176		W	1,811,961		W	18,561,137
Comprehensive income
Profit for the period				—		—		768,555			—			—			768,555			34,989			803,544
Remeasurements of net defined benefit liabilities		14		—		—		556			—			—			556			(1,204	)		(648	)
Share of remeasurement of the net defined benefit liabilities of associates and joint ventures				—		—		(510	)		—			—			(510	)		(186	)		(696	)
Share of other comprehensive income of associates and joint ventures				—		—		—			4,463			—			4,463			454			4,917
Valuation gains (losses) on cash flow hedges		6		—		—		—			(11,219	)		—			(11,219	)		(289	)		(11,508	)
Valuation gains on financial instruments at fair value through other comprehensive income				—		—		1,414			229,077			—			230,491			310			230,801
Exchange differences on translation of foreign operations				—		—		—			19,479			—			19,479			26,927			46,406

Total comprehensive income for the period				—		—		770,015			241,800			—			1,011,815			61,001			1,072,816

Transactions with owners
Dividends paid by the Controlling Company				—		—		(482,970	)		—			—			(482,970	)		—			(482,970	)
Interim dividends paid by the Controlling Company				—		—		(122,859	)		—			—			(122,859	)		—			(122,859	)
Dividends paid to non-controlling interest of subsidiaries				—		—		—			—			—			—			(20,642	)		(20,642	)
Change in Consolidation Scope				—		—		—			—			—			—			(796	)		(796	)
Change in ownership interests in subsidiaries				—		—		—			—			(15,777	)		(15,777	)		14,562			(1,215	)
Acquisition of treasury stock				—		—		—			—			(27,100	)		(27,100	)		—			(27,100	)
Disposal of treasury stock				—		—		—			—			3,760			3,760			—			3,760
Retirement of treasury stocks				—		—		(205,956	)		—			205,956			—			—			—
Others				—		—		—			—			(1,598	)		(1,598	)		1,368			(230	)

Subtotal				—		—		(811,785	)		—			165,241			(646,544	)		(5,508	)		(652,052	)

Balance as of June 30, 2024			W	1,564,499	W	1,440,258	W	14,452,660		W	294,207		W	(637,177	)	W	17,114,447		W	1,867,454		W	18,981,901

The above consolidated interim statements of changes in equity should be read in conjunction with the accompanying notes.

KT Corporation and Its Subsidiaries

Consolidated Interim Statements of Cash Flows

For the six-month periods ended June 30, 2024 and 2023


			Six-Month Periods Ended June 30
(In millions of Korean won)	Notes		2024			2023
Cash flows from operating activities
Cash generated from operations		25	W	3,428,623		W	2,864,299
Interest paid				(214,215	)		(190,745	)
Interest received				188,726			173,784
Dividends received				48,179			37,661
Income tax paid				(214,987	)		(207,457	)

Net cash inflow from operating activities				3,236,326			2,677,542

Cash flows from investing activities
Collection of loans				18,672			22,240
Disposals of financial assets at fair value through profit or loss				74,119			65,088
Disposals of financial assets at amortized cost				949,781			924,623
Disposals of financial assets at fair value through other comprehensive income				7,851			306
Disposals of investments in associates and joint ventures				3,745			5,405
Disposals of property, equipment and investment properties				26,696			33,556
Disposals of intangible assets				4,069			4,641
Disposals of right-of-use assets				100			1,330
Disposals of derivatives				—			4,888
Increase in cash due to consolidation scope change				9,847			1,765
Loans granted				(14,278	)		(16,865	)
Acquisitions of financial assets at fair value through profit or loss				(105,687	)		(49,719	)
Acquisitions of financial assets at amortized cost				(546,754	)		(960,331	)
Acquisitions of financial assets at fair value through other comprehensive income				(1,000	)		(501	)
Acquisitions of investments in associates and joint ventures				(29,580	)		(42,911	)
Acquisitions of property and equipment and investment properties				(1,205,286	)		(1,690,823	)
Acquisitions of intangible assets				(345,359	)		(471,838	)
Acquisitions of right-of-use assets				(4,666	)		(568	)
Decrease in cash due to consolidation scope change				(10,310	)		(3,134	)

Net cash outflow from investing activities			W	(1,168,040	)	W	(2,172,848	)

KT CORPORATION and ITS SUBSIDIARIES

Consolidated Interim Statements of Cash Flows

For the six-month periods ended June 30, 2024 and 2023


		Six-Month Periods Ended June 30
(In millions of Korean won)	Notes	2024			2023
Cash flows from financing activities
Proceeds from borrowings		W	2,060,181		W	3,356,398
Cash inflow from derivatives contracts			1,118			26,593
Cash inflow from transactions with non-controlling shareholders			812			—
Cash inflow from other financing activities			130			2,017
Repayments of borrowings			(2,341,632	)		(3,497,760	)
Dividends paid			(626,429	)		(526,268	)
Decrease in finance lease liabilities			(200,555	)		(208,342	)
Decrease in other financial liabilities			—			(4	)
Acquisition of treasury stock			(27,100	)		(300,086	)
Cash outflow from transactions with non-controlling shareholders			(30,738	)		(3,085	)
Cash outflow from other financing activities			(36	)		—

Net cash outflow from financing activities			(1,164,249	)		(1,150,537	)

Effect of exchange rate change on cash and cash equivalents			3,133			2,278

Net increase (decrease) in cash and cash equivalents			907,170			(643,565	)
Cash and cash equivalents
Beginning of the period			2,879,554			2,449,062

End of the period		W	3,786,724		W	1,805,497

The above consolidated interim statements of cash flows should be read in conjunction with the accompanying notes.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

1.	General Information

The consolidated financial statements have been prepared by KT Corporation, the “Controlling Company” as defined under Korean IFRS 1110 Consolidated Financial Statements, by consolidating 82 subsidiaries (collectively referred to as the “Group”) including BC Card Co., Ltd., etc. as described in Note 1.2

1.1

The Controlling Company

KT Corporation (the “Controlling Company”) commenced operations on January 1, 1982, when it spun off from the Korea Communications Commission (formerly the Korean Ministry of Information and Communications) to provide telecommunication services and to engage in the development of advanced communications services under the Act of Telecommunications of Korea. The address of the Controlling Company’s registered office is 90, Buljeong-ro, Bundang-gu, Seongnam City, Gyeonggi Province, Korea.

On October 1, 1997, upon the announcement of Act on the Management of the Government-Invested Institutions and the Privatization Law, the Controlling Company became a government-funded institution under the Commercial Code of Korea.

On December 23, 1998, the Controlling Company’s shares were listed on the Korea Exchange.

On May 29, 1999, the Controlling Company issued 24,282,195 additional shares and issued American Depository Shares (ADS), which represents new shares and 20,813,311 government-owned shares, on the New York Stock Exchange. On July 2, 2001, additional ADS representing 55,502,161 government-owned shares were issued on the New York Stock Exchange.

In 2002, the Controlling Company acquired the entire government-owned shares in accordance with the Korean government’s privatization plan. As of June 30, 2024, the Korean government does not own any shares in the Controlling Company.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

1.2

Consolidated Subsidiaries

(1)

The consolidated subsidiaries as of June 30, 2024 and December 31, 2023, are as follows:


			Controlling Interest ¹(%)
Subsidiary	Type of business	Location	June 30, 2024			December 31, 2023			Closing month
KT Linkus Co., Ltd.	Public telephone maintenance	Korea		92.4	%		92.4	%	December
KT Telecop Co., Ltd.	Security service	Korea		86.8	%		86.8	%	December
KT Alpha Co., Ltd.⁵	Data communication	Korea		73.0	%		73.0	%	December
KT Service Bukbu Co., Ltd	Opening services of fixed line	Korea		67.3	%		67.3	%	December
KT Service Nambu Co., Ltd.	Opening services of fixed line	Korea		77.3	%		77.3	%	December
KT Commerce Inc.	B2C, B2B service	Korea		100.0	%		100.0	%	December
KT Strategic Investment Fund No.3	Investment fund	Korea		100.0	%		100.0	%	December
KT Strategic Investment Fund No.4	Investment fund	Korea		100.0	%		100.0	%	December
KT Strategic Investment Fund No.5	Investment fund	Korea		100.0	%		100.0	%	December
BC-VP Strategic Investment Fund No.1	Investment fund	Korea		100.0	%		100.0	%	December
BC Card Co., Ltd.	Credit card business	Korea		69.5	%		69.5	%	December
VP Inc. ⁵	Payment security service for credit card, others	Korea		72.2	%		72.2	%	December
H&C Network	Call center for financial sectors	Korea		100.0	%		100.0	%	December
BC Card China Co., Ltd.	Software development and data processing	China		100.0	%		100.0	%	December
INITECH Co., Ltd. ⁵	Internet banking ASP and security solutions	Korea		66.1	%		63.9	%	December
Smartro Co., Ltd.	VAN (Value Added Network) business	Korea		64.5	%		64.5	%	December
KTDS Co., Ltd. ⁵	System integration and maintenance	Korea		91.6	%		91.6	%	December
KT M&S Co., Ltd.	PCS distribution	Korea		100.0	%		100.0	%	December
GENIE Music Corporation ^2,	Online music production and distribution	Korea		36.0	%		36.0	%	December
KT MOS Bukbu Co., Ltd. ⁵	Telecommunication facility maintenance	Korea		100.0	%		100.0	%	December
KT MOS Nambu Co., Ltd. ⁵	Telecommunication facility maintenance	Korea		98.4	%		98.4	%	December
KT Skylife ⁵	Satellite TV	Korea		50.6	%		50.6	%	December
Skylife TV Co., Ltd.	TV contents provider	Korea		100.0	%		100.0	%	December
KT Estate Inc.	Residential building development and supply	Korea		100.0	%		100.0	%	December
KT Investment Management Inc.	Asset management, real estate, and consulting services	Korea		100.0	%		100.0	%	December
NEXR Co., Ltd.	Cloud system implementation	Korea		100.0	%		100.0	%	December
KTGDH Co., Ltd.	Data center development and related service	Korea		100.0	%		100.0	%	December
KT Sat Co., Ltd.	Satellite communication business	Korea		100.0	%		100.0	%	December
Nasmedia, Co., Ltd. ^2,5	Solution provider and IPTV advertisement sales business	Korea		44.1	%		44.1	%	December
KT Sports Co., Ltd.	Management of sports teams	Korea		100.0	%		100.0	%	December
KT Music Contents Fund No.2	Music and contents investment business	Korea		100.0	%		100.0	%	December
KTCS Corporation ^2,5	Database and online information provider	Korea		34.1	%		34.1	%	December
KTIS Corporation ^2,5	Database and online information provider	Korea		33.3	%		33.3	%	December

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


			Controlling Interest ¹(%)
Subsidiary	Type of business	Location	June 30, 2024			December 31, 2023			Closing month
KT M Mobile Co., Ltd.	Special category telecommunications operator and sales of communication device	Korea		100.0	%		100.0	%	December
KT Investment Co., Ltd.	Financing business for new technology	Korea		100.0	%		100.0	%	December
PlayD Co., Ltd.	Advertising agency	Korea		70.4	%		70.4	%	December
Next Connect PFV	Residential building development and supply	Korea		100.0	%		100.0	%	December
KT Rwanda Networks Ltd.	Network installation and management	Rwanda		51.0	%		51.0	%	December
AOS Ltd.	System integration and maintenance	Rwanda		51.0	%		51.0	%	December
KT Japan Co., Ltd.	Foreign investment business and local counter work	Japan		100.0	%		100.0	%	December
East Telecom LLC	Wireless/fixed line internet business	Uzbekistan		91.6	%		91.6	%	December
KT America, Inc.	Foreign investment business and local counter work	USA		100.0	%		100.0	%	December
PT. BC Card Asia Pacific	Software development and supply	Indonesia		99.9	%		99.9	%	December
KT Hongkong Telecommunications Co., Ltd.	Fixed line telecommunication business	Hong Kong		100.0	%		100.0	%	December
Korea Telecom Singapore Pte. Ltd.	Foreign investment business and local counter work	Singapore		100.0	%		100.0	%	December
Texnoprosistem LLC	Fixed line internet business	Uzbekistan		100.0	%		100.0	%	December
Nasmedia Thailand Co., Ltd.	Internet advertising solution	Thailand		99.9	%		99.9	%	December
KT Huimangjieum	Manufacturing	Korea		100.0	%		100.0	%	December
K-REALTY RENTAL HOUSING REIT 3	Residential building	Korea		88.6	%		88.6	%	December
Storywiz Co., Ltd.	Contents and software development and supply	Korea		100.0	%		100.0	%	December
KT Engineering Co., Ltd.	Telecommunication facility construction and maintenance	Korea		100.0	%		100.0	%	December
KT Studio Genie Co., Ltd.	Data communication service and data communication construction business	Korea		90.9	%		90.9	%	December
KHS Corporation	Operation and maintenance of facilities	Korea		100.0	%		100.0	%	December
HCN Co., Ltd.	Cable television service	Korea		100.0	%		100.0	%	December
Millie Seojae ²	Book contents service	Korea		38.7	%		30.2	%	December
KT ES Pte. Ltd.	Foreign investment business	Singapore		68.8	%		57.6	%	December
Epsilon Global Communications PTE. Ltd.	Network service industry	Singapore		100.0	%		100.0	%	December
Epsilon Telecommunications (SP) PTE. Ltd.	Fixed line telecommunication business	Singapore		100.0	%		100.0	%	December
Epsilon Telecommunications (US) PTE. Ltd.	Fixed line telecommunication business	Singapore		100.0	%		100.0	%	December
Epsilon Telecommunications Limited	Fixed line telecommunication business	UK		100.0	%		100.0	%	December
Epsilon Telecommunications (HK) Limited	Fixed line telecommunication business	Hong Kong		100.0	%		100.0	%	December
Epsilon US Inc.	Fixed line telecommunication business	USA		100.0	%		100.0	%	December
Epsilon Telecommunications (BG) EOOD	Employee support service	Bulgaria		100.0	%		100.0	%	December
Nasmedia-KT Alpha Future Growth Strategic Investment Fund	Investment fund	Korea		100.0	%		100.0	%	December
KT Strategic Investment Fund 6	Investment fund	Korea		100.0	%		100.0	%	December

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


			Controlling Interest ¹(%)
Subsidiary	Type of business	Location	June 30, 2024			December 31, 2023			Closing month
Altimedia Corporation	Software development and delivery	Korea		100.0	%		100.0	%	December
Altimidia B.V.	Software development and delivery	Netherlands		100.0	%		100.0	%	December
Altimidia Vietnam	Software development and delivery	Vietnam		100.0	%		100.0	%	December
BCCARD VIETNAM LTD.	Software sales business	Vietnam		100.0	%		100.0	%	December
KTP SERVICES INC.	Fixed line telecommunication business	Philippines		100.0	%		100.0	%	December
KT RUS LLC	Foreign investment business	Russia		100.0	%		100.0	%	December
Hangang Real Estate Investment Trust No. 24	Investment fund	Korea		75.0	%		75.0	%	December
KT DX VIETNAM COMPANY LIMITED	Software development	Vietnam		100.0	%		100.0	%	December
KT Cloud Co., Ltd.	Information and communications development	Korea		92.7	%		92.7	%	December
PT CRANIUM ROYAL ADITAMA	Software development	Indonesia		67.0	%		67.0	%	December
Juice Inc.^3,5	Online information provider/Software development and delivery	Korea		41.9	%		42.6	%	December
Open cloud lab Co., Ltd	IT consulting service and Telecommunication equipment sales	Korea		100.0	%		100.0	%	December
KT Living, Inc. (formerly KD Living, Inc.)	Residential building management	Korea		100.0	%		100.0	%	December
K-Realty Qualified Private Real Estate Investment Trust No. 1 ⁴	Real estate management	Korea		6.5	%		6.5	%	December
AQUA RETAIL VIETNAM COMPANY LIMITED	E-voucher issuance and trading business	Vietnam		100.0	%		100.0	%	December
K-Realty Qualified Private Real Estate Investment Trust No. 4	Real estate management	Korea		93.9	%		93.9	%	December
BC Strategic Investment Fund 2	Investment fund	Korea		100.0	%		—		December

¹	Sum of the interests owned by the Controlling Company and subsidiaries.

Although the Controlling Company owns less than 50% interest in Nasmedia, Co., Ltd., KTCS Corporation and KTIS Corporation, Millie Seojae, and GENIE Music Corporation, considering voting patterns at previous shareholders’ meetings, these entities are consolidated as the Controlling Company has the ability to exercise the majority of the voting rights in its decision-making process at all times.

³	Although the Controlling Company owns less than 50% interest in, Juice Inc., this entity is consolidated as the Controlling Company holds the majority of the voting right based on an agreement with other investors.

⁴

Although the Controlling Company owns less than 50% interest in K-Realty Qualified Private Real Estate Investment Trust No. 1, this entity is consolidated by comprehensively considering the criteria for determining control, such as ‘power’, ‘variable profit’, and ‘relationship between power and variable profit’, rather than simply judging by the interests owned by the Controlling Company.

⁵	The number of treasury stocks held by subsidiaries are deducted from the total number of shares when calculating the controlling percentage interest.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Changes in Scope of Consolidation

Subsidiaries newly included and excluded in the consolidation during the six-month period ended June 30, 2024:


Changes	Location	Name of subsidiary	Reason
Included	Korea	BC Strategic Investment Fund 2	Newly established
Excluded	Korea	Lolab Co., Ltd.	Excluded
Excluded	Korea	Pocheon Jeonggyori Development Co., Ltd.	Liquidated
Excluded	Vietnam	KT HEALTHCARE VINA COMPANY LIMITED	Excluded

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(3)

Summarized information for consolidated subsidiaries as of June 30, 2024 and December 31, 2023 and for the six-month periods ended June 30, 2024 and 2023, is as follows


(In millions of Korean won)	June 30, 2024				Six-month period ended June 30, 2024³
	Total assets		Total liabilities		Operating revenues		Profit(loss) for the period
KT Linkus Co., Ltd.	W	57,482		57,954		39,554		(1,335	)
KT Telecop Co., Ltd.		391,984		249,256		262,403		5,911
KT Alpha Co., Ltd.		429,865		173,140		214,323		13,533
KT Service Bukbu Co., Ltd.		56,093		52,874		110,547		(5,181	)
KT Service Nambu Co., Ltd.		62,364		56,856		137,851		(7,323	)
BC Card Co., Ltd. ¹		6,319,545		4,594,100		1,913,228		99,904
H&C Network		82,389		4,001		13,438		996
Nasmedia Co., Ltd. ¹		500,893		247,483		67,991		10,182
KTDS Co., Ltd. ¹		377,980		170,842		336,092		23,182
KT M&S Co., Ltd.		267,875		209,824		391,267		8,650
KT MOS Bukbu Co., Ltd.		54,976		31,831		49,590		826
KT MOS Nambu Co., Ltd.		54,023		31,625		49,984		1,571
KT Skylife Co., Ltd. ¹		1,276,393		546,879		509,026		(1,437	)
KT Estate Inc. ¹		2,607,700		959,544		291,521		13,540
KT GDH Co., Ltd.		7,837		1,390		2,101		188
KT Sat Co., Ltd.		717,505		90,889		90,339		15,580
KT Sports Co., Ltd.		45,377		27,934		42,130		2,133
KT Music Contents Fund No.2		5,343		1,526		65		31
KT M Mobile Co., Ltd.		185,361		72,651		167,951		5,205
KT Investment Co., Ltd. ¹		85,382		57,828		5,932		1,336
KTCS Corporation ¹		447,576		253,747		583,588		(902	)
KTIS Corporation		477,651		270,487		296,883		8,039
Next Connect PFV		1,133,755		821,975		—		(5,098	)
KT Japan Co., Ltd. ¹		1,797		2,866		1,600		183
KT America, Inc.		6,382		607		3,798		82
KT Rwanda Networks Ltd. ²		137,896		329,171		10,740		(4,447	)
AOS Ltd. ²		12,275		17,275		5,338		769
KT Hong Kong Telecommunications Co., Ltd.		12,093		5,147		10,205		386
KT Huimangjieum ¹		9,057		2,241		9,008		1,457
KT Engineering Co., Ltd.		138,204		82,418		130,292		(1,518	)
KT Studio Genie Co., Ltd. ¹		974,115		245,990		205,949		(3,176	)
East Telecom LLC ¹		72,685		39,352		17,619		4,767
KT ES Pte. Ltd. ¹		155,923		64,317		46,484		(6,764	)
KTP SERVICES INC.		2,826		662		398		101
Altimedia Corporation ¹		44,229		10,574		17,268		232
KT RUS LLC		452		—		—		(90	)
KT DX VIETNAM COMPANY LIMITED		1,581		91		159		(142	)

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	June 30, 2024				Six-month period ended June 30, 2024³
	Total assets		Total liabilities		Operating revenues		Profit(loss) for the period
KT Cloud Co., Ltd. ¹		2,033,100		537,007		355,253		14,548
K-Realty Qualified Private Real Estate Investment Trust No. 1		79,407		50,589		2,017		(755	)
AQUA RETAIL VIETNAM COMPANY LIMITED		845		94		211		(415	)

¹	As intermediate controlling companies, financial information from their consolidated financial statements is presented.

²	Convertible preferred stock issued by subsidiaries as of the end of the reporting period is included in liabilities.

³	Profit or loss from the acquisition date of control to the end of the reporting period is included.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)		December 31, 2023				Six-month period ended June 30, 2023³
	Total assets		Total liabilities		Operating revenues		Profit(loss) for the period
KT Linkus Co., Ltd.	W	64,178		63,452		39,337		1,254
KT Telecop Co., Ltd.		375,596		235,947		262,124		3,216
KT Alpha Co., Ltd.		443,639		191,254		217,449		12,496
KT Service Bukbu Co., Ltd.		63,760		55,360		115,457		(2,482	)
KT Service Nambu Co., Ltd.		71,576		58,745		140,109		(2,491	)
BC Card Co., Ltd. ¹		6,352,878		4,722,432		2,002,365		30,635
H&C Network		81,107		4,863		13,728		933
Nasmedia Co., Ltd. ¹		513,311		262,336		67,510		7,646
KTDS Co., Ltd. ¹		393,667		202,067		340,777		18,873
KT M&S Co., Ltd.		258,477		209,075		320,488		3,215
KT MOS Bukbu Co., Ltd.		50,750		28,431		47,848		5,798
KT MOS Nambu Co., Ltd.		46,839		26,012		47,564		4,246
KT Skylife Co., Ltd. ¹		1,220,842		479,369		516,072		24,208
KT Estate Inc. ¹		2,664,880		1,021,741		258,212		10,979
KT GDH Co., Ltd.		7,760		1,501		2,233		303
KT Sat Co., Ltd.		699,607		88,524		86,592		13,567
KT Sports Co., Ltd.		26,615		11,299		30,107		(6,291	)
KT Music Contents Fund No.2		5,558		1,772		285		138
KT M Mobile Co., Ltd.		176,838		69,317		145,227		3,119
KT Investment Co., Ltd. ¹		83,638		57,420		23,019		3,681
KTCS Corporation ¹		434,900		234,850		470,984		9,910
KTIS Corporation		447,609		243,519		287,211		9,489
Next Connect PFV		946,687		629,809		—		(1,514	)
KT Japan Co., Ltd. ¹		2,015		3,341		1,382		(6	)
KT America, Inc.		6,013		701		4,562		86
KT Rwanda Networks Ltd. ²		134,847		313,787		16,247		(28,379	)
AOS Ltd. ²		10,763		1,983		4,129		680
KT Hong Kong Telecommunications Co., Ltd.		11,142		5,121		9,475		115
KT Huimangjieum ¹		8,073		2,715		8,159		1,359
KT Engineering Co., Ltd.		160,243		104,005		80,823		(5,235	)
KT Studio Genie Co., Ltd. ¹		989,187		259,413		233,832		14,975
Lolab Co., Ltd.		42,744		37,838		79,795		(6,841	)
East Telecom LLC ¹		48,483		22,632		14,594		3,373
KT ES Pte. Ltd.¹		117,009		90,392		43,125		(3,851	)
KTP SERVICES INC.		2,967		919		283		12
Altimedia Corporation ¹		48,381		12,374		21,909		2,768
KT RUS LLC		501		10		—		(382	)

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)		December 31, 2023				Six-month period ended June 30, 2023³
	Total assets		Total liabilities		Operating revenues		Profit(loss) for the period
KT DX VIETNAM COMPANY LIMITED		1,694		102		23		(94	)
KT cloud Co., Ltd. ¹		1,983,972		503,241		302,433		18,345
KT HEALTHCARE VINA COMPANY LIMITED		12,730		439		—		(138	)
K-Realty Qualified Private Real Estate Investment Trust No. 1		80,266		50,693		1,965		(947	)
AQUA RETAIL VIETNAM COMPANY LIMITED		1,202		62		—		4

¹	As intermediate controlling companies, financial information from their consolidated financial statements is presented.

²	Convertible preferred stock issued by subsidiaries as of the end of the reporting period is included in liabilities.

³	Profit or loss from the acquisition date of control to the end of the reporting period is included.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

2.	Material Accounting Policies

2.1

Basis of Preparation

The Group maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (K-IFRS). The accompanying consolidated financial statements have been condensed, restructured, and translated into English from the Korean language financial statements.

The consolidated interim financial statements of the Group for the six-month period ended June 30, 2024, have been prepared in accordance with Korean IFRS 1034 Interim Financial Reporting. In order to understand the consolidated interim financial statements, the annual consolidated financial statements as of December 31, 2023 prepared in accordance with IFRS should be used together.

2.2

Changes in Accounting Policy and Disclosures

(1)

New and amended standards and interpretations adopted by the Group

The Group has applied a number of new and amended standards and new interpretations issued that are effective for accounting periods beginning on January 1, 2024.

•

K-IFRS 1001 Presentation of Financial Statements (Amendment in 2020) – Classification of Liabilities as Current or Non-current

The amendments clarify that the classification of liabilities as current and non-current is based on rights that are existing at the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period, and introduce a definition of ‘settlement’ to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

•

K-IFRS 1001 Presentation of Financial Statements (Amendment in 2023) - Non-current Liabilities with Covenants

The amendments specify that only covenants that an entity is required to comply with on or before the end of the reporting period affect the entity’s right to defer settlement of a liability for at least twelve months after the reporting date. Such covenants affect whether the right exists at the end of the reporting period, even if compliance with the covenant is assessed only after the reporting date.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

The amendments also specify that the right to defer settlement of a liability for at least twelve months after the reporting date is not affected if an entity must only comply with a covenant after the reporting period. However, if the entity’s right to defer settlement of a liability is subject to the entity complying with covenants within twelve months after the reporting period, an entity discloses information that enables users of financial statements to understand the risk of the liabilities becoming repayable within twelve months after the reporting period. This would include information about the covenants (including the nature of the covenants and when the entity is required to comply with them), the carrying amount of related liabilities and facts and circumstances, if any, that indicate that the entity may have difficulties complying with the covenants.

•

K-IFRS 1007 Cash Flow Statement and K-IFRS 1107 Financial Instruments Disclosure (Amendment)—Supplier Finance Agreements

The amendments add a disclosure objective in K-IFRS 1007 Cash Flow Statement stating that an entity is required to disclose information about supplier finance agreements that enables users of financial statements to assess the effects of those arrangements on the Group’s liabilities and cash flows. In addition, K-IFRS 1107 is amended to add supplier finance arrangements as an example within the requirements to disclose information about an entity’s exposure to concentration of liquidity risk.

The term ‘supplier finance agreements’ is not defined; instead, the amendments describe the characteristics of an arrangement for which an entity would be required to provide the information.

To meet the disclosure objective, an entity will be required to disclose in aggregate for its supplier finance arrangements:

•

The terms and conditions of an agreement

•

The carrying amount, and associated line items presented in the entity’s statement of financial position, of the liabilities that are part of the arrangements

•

The carrying amount, and associated line items for which the suppliers have already received payment from the finance providers

•

Ranges of payment due dates for both those financial liabilities that are part of a supplier finance arrangement and comparable trade payables that are not part of a supplier finance arrangement

•

Types of non-cash changes in the carrying amount of financial liabilities corresponding to supplier finance agreements and their impact

•

Liquidity risk information

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

•

K-IFRS 1116 Leases (Amendment)—Lease Liability in a Sale and Leaseback

The amendments add a subsequent measurement requirement for sale and leaseback transactions that satisfy the requirements in K-IFRS 1115 Revenue from contracts with customers. The amendments require the seller-lessee to determine ‘lease payments’ or ‘revised lease payments’ in such a way that the seller-lessee does not recognise a gain or loss that relates to the right of use asset retained by the seller-lessee, after the lease commencement date.

•

K-IFRS 1001 Presentation of Financial Statements (Amendment in 2023)—Disclosure of Virtual Assets

The amendments, in addition to additional disclosure requirements required by other Standards for transactions related to virtual assets, set out the disclosure requirements in each case of 1) holding virtual assets; 2) holding virtual assets on behalf of customers; and 3) issuing virtual assets.

When holding a virtual asset, disclosure on the general information of the virtual asset, the applied accounting policy, and the acquisition method, acquisition cost, and the fair value of each virtual asset at the end of the reporting period must be disclosed. In addition, when issuing a virtual asset, the entity’s obligations and the status of fulfilment of the obligation related to the issued virtual asset, the timing and amount of the recognized revenue of the sold virtual asset, the quantity of virtual assets held after issuance, and important contract details should be disclosed.

(2)

New and revised standards and interpretations in issue but not yet effective or adopted by the Group

At the date of authorization of these financial statements, the Group has not applied the following new and amended K-IFRS standards that have been issued but are not yet effective:

•

K-IFRS 1021 The effects of changes in foreign exchange rates and K-IFRS 1101 First time adoption of international financial reporting- Improving Interchangeability

The amendments define situations in which exchange with other currencies is possible for accounting purposes and clarify the assessment of the exchangeability with other currencies, the estimation and requirements for disclosure of spot exchange rates to be used in the absence of exchangeability.

If exchange for other currencies is not possible, the spot exchange rate should be estimated on the measurement date, and the observable exchange rate should be used without adjustment or other estimation techniques should be used.

The above amendments are applicable for annual reporting periods beginning on or after 1 January 2025, with early application permitted.

The Group is reviewing the impact of the above-listed amendments on the financial statements.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

2.3

Accounting Policies

Material accounting policies and method of computation used in the preparation of the consolidated interim financial statements are consistent with those of the consolidated financial statements for the year ended December 31, 2023, except for the changes due to the application of amendment and enactments of standards described in Note 2.2 (1) and as described below.

2.3.1

Income Tax Expense

Income tax expense for the interim period is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate is applied to the pre-tax income of the interim period.

3.	Critical Accounting Estimates and Assumptions

The preparation of financial statements requires the Group to make estimates and assumptions concerning the future. Management also needs to exercise judgement in applying the Group’s accounting policies. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. As the resulting accounting estimates will, by definition, seldom equal the actual results, they pose significant risk of resulting in a material adjustment.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

4.	Financial Instruments by Category

Financial instruments by category as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024
Financial assets	Financial assets at amortized cost		Financial assets at FVTPL		Financial assets at FVOCI		Derivatives used for hedging		Total
Cash and cash equivalents	W	3,786,724		—		—		—		3,786,724
Trade and other receivables		8,148,722		—		112,860		—		8,261,582
Other financial assets		1,002,142		1,064,624		1,983,633		324,845		4,375,244

(In millions of Korean won)	June 30, 2024
Financial liabilities	Financial liabilities at amortized cost		Financial liabilities at FVTPL		Derivatives used for hedging		Others		Total
Trade and other payables¹	W	8,007,446		—		—		—		8,007,446
Borrowings		10,150,585		—		—		—		10,150,585
Other financial liabilities		906,785		113,329		1,684		—		1,021,798
Lease liabilities		—		—		—		1,138,425		1,138,425

Amounts related to employee benefit plans are excluded in Trade and other payables.


(In millions of Korean won)	December 31, 2023
Financial assets	Financial assets at amortized cost		Financial assets at FVTPL		Financial assets at FVOCI		Derivatives used for hedging		Total
Cash and cash equivalents	W	2,879,554		—		—		—		2,879,554
Trade and other receivables		8,458,259		—		116,198		—		8,574,457
Other financial assets		1,385,921		939,661		1,680,168		159,211		4,164,961

(In millions of Korean won)	December 31, 2023
Financial liabilities	Financial liabilities at amortized cost		Financial liabilities at FVTPL		Derivatives used for hedging		Others		Total
Trade and other payables¹	W	8,317,822		—		—		—		8,317,822
Borrowings		10,218,165		—		—		—		10,218,165
Other financial liabilities		915,185		136,106		24,547		—		1,075,838
Lease liabilities		—		—		—		1,179,909		1,179,909

¹	Amounts related to employee benefit plans are excluded in Trade and other payables.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

5.	Trade and Other Receivables

(1)

Trade and other receivables as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024
	Total amounts		Provision for impairment			Present value discount			Carrying amount
Current assets
Trade receivables	W	3,543,584		(363,387	)		(8,896	)		3,171,301
Other receivables		3,807,265		(94,357	)		(2,333	)		3,710,575

Total		7,350,849		(457,744	)		(11,229	)		6,881,876

Non-current assets
Trade receivables		261,774		(1,295	)		(16,224	)		244,255
Other receivables		1,244,964		(96,551	)		(12,962	)		1,135,451

Total	W	1,506,738		(97,846	)		(29,186	)		1,379,706


(In millions of Korean won)	December 31, 2023
	Total amounts		Provision for impairment			Present value discount			Carrying amount
Current assets
Trade receivables	W	3,596,899		(330,002	)		(9,165	)		3,257,732
Other receivables		3,990,900		(76,089	)		(2,254	)		3,912,557

Total		7,587,799		(406,091	)		(11,419	)		7,170,289

Non-current assets
Trade receivables		318,429		(1,288	)		(19,476	)		297,665
Other receivables		1,227,929		(107,547	)		(13,879	)		1,106,503

Total	W	1,546,358		(108,835	)		(33,355	)		1,404,168

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Details of other receivables as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Loans	W	43,058			51,854
Receivables ¹		3,407,553			3,539,742
Accrued income		52,143			43,920
Refundable deposits		268,403			299,935
Loans receivable		1,058,088			1,067,005
Finance lease receivables		151,747			141,883
Others		55,942			58,357
Less: Provision for impairment		(190,908	)		(183,636	)

Total	W	4,846,026			5,019,060

¹	As of June 30, 2024, credit sales asset of W 2,551,310 million (December 31, 2023: W 2,696,505 million) held by BC Card Co., Ltd. are included.

(3)

The maximum exposure to credit risks for trade and other receivables is the carrying amount of each class of receivables mentioned above as of June 30, 2024.

(4)

The Group classifies a certain portion of trade receivables as financial assets at FVOCI, based on, business model for managing the asset and the cash flow characteristics of the contract.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

6.	Other Financial Assets and Liabilities

(1)

Details of other financial assets and liabilities as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Other financial assets
Financial assets at amortized cost ¹	W	1,002,142			1,385,921
Financial assets at FVTPL ^1,2		1,064,624			939,661
Financial assets at FVOCI		1,983,633			1,680,168
Derivatives used for hedging		324,845			159,211
Less: Non-current		(3,070,502	)		(2,724,761	)

Current	W	1,304,742			1,440,200

Other financial liabilities
Financial liabilities at amortized cost ^3,4	W	906,785			915,185
Financial liabilities at FVTPL		113,329			136,106
Derivatives used for hedging		1,684			24,547
Less: Non-current		(696,966	)		(753,739	)

Current	W	324,832			322,099

¹	As of June 30, 2024, the Group’s financial instruments amount to W116,822 million (December 31, 2023: W 98,309 million) and consist of checking account deposits, time deposits, and others which are subject to withdrawal restrictions.

²	As of June 30, 2024, the Group provided investments in Korea Software Financial Cooperative and others amounting to W9,485 million as a collateral in exchange for the payment guarantee provided by the Korea Software Financial Cooperative and others.

³	The amount includes liabilities related to the obligation to acquire additional shares in Epsilon Global Communications Pte. Ltd. and KT Cloud Co., Ltd. (Note 15).

⁴	The amount includes liabilities convertible preferred Stock issued by KT Cloud Co., Ltd. (Note 15).

(2)

Financial Assets at fair value through profit or loss

Details of financial assets at fair value through profit or loss as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Equity instruments (Listed)	W	8,042			13,911
Equity instruments (Unlisted)		41,886			42,185
Debt securities		1,007,044			880,549
Derivatives held for trading ¹		7,652			3,016

Total		1,064,624			939,661
Less: Non-current		(841,814	)		(782,143	)

Current	W	222,810			157,518

¹	According to a derivative arrangement with LS Cable & System Ltd. in connection with LS Marine Solution Co., Ltd., derivative assets amounting to W 1,015 million is included as of June 30, 2024 (Note 15).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

The maximum exposure to credit risks for debt instruments of financial assets at fair value through profit or loss is the carrying amount of each class of debt instruments above as of June 30, 2024.

(3)

Financial Assets at fair value through other comprehensive income

Details of financial assets at fair value through other comprehensive income as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Equity instruments (Listed)	W	1,533,518			1,231,188
Equity instruments (Unlisted)		444,198			443,067
Debt securities		5,917			5,913

Total		1,983,633			1,680,168
Less: Non-current		(1,983,633	)		(1,680,168	)

Current	W	—			—

Upon disposal of these equity investments, any balance within the accumulated other comprehensive income is reclassified not to profit or loss, but to retained earnings. Upon disposal of these debt investments, the remaining balance of the accumulated other comprehensive income is reclassified to profit or loss.

(4)

Derivatives used for Hedging

Details of valuation of derivatives used for hedging as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024 Assets Liabilities				December 31, 2023 Assets Liabilities
Interest rate swap ¹	W	1,729		82		1,530		191
Currency swap ²		323,116		1,602		157,681		24,356

Total		324,845		1,684		159,211		24,547
Less: Non-current		(239,899	)	—		(107,802	)	(23,696	)

Current	W	84,946		1,684		51,409		851

¹	The interest rate swap contract is to hedge the risk of variability in cash flow from the floating-rate borrowings due to changes in interest rate.

²	The currency swap contract is to hedge the risk of variability in cash flow from the borrowings due to changes in interest rate and foreign exchange rate and the expected maximum period for the Group to be exposed to risks of cash flow fluctuation by hedged items is until September 7, 2034.

The entire fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and, as a current asset or liability, if the maturity of the hedged item is within 12 months.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

Details of valuation gains and losses on the derivative instruments for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)
	2024							2023
Type of transaction	Valuation gain		Valuation loss		Other comprehensive loss¹			Valuation gain		Valuation loss		Other comprehensive loss¹
Interest rate swap	W	31		—		324			—		31		(1,353	)
Currency swap		202,420		354		(15,642	)		96,663		185		(36,178	)

Total	W	202,451		354		(15,318	)		96,663		216		(37,531	)

¹	The amounts are before adjustments for deferred income tax and allocations to non-controlling interests and have been directly reflected in equity.

The ineffective portion recognized in profit or loss relate to cash flow hedges is valuation gain of W1,302 million for the six-month periods ended June 30, 2024 (For the Six-month periods ended June 30, 2023: valuation gain of W958 million).

(5)

Financial Liabilities at fair value through profit or loss

Details of financial liabilities at fair value through profit or loss as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Derivatives held for trading ^1,2	W	113,329		136,106

The Group signed a shareholder-to-share agreement with financial investors participating in the paid-in capital increase of K Bank Inc. for the six-month period ended June 30, 2024. According to the Drag-Along Right, if K Back inc. fails to be listed on the terms agreed upon for the date of completion of the acquisition, financial investors may exercise the Drag-Along right to the Group, and the Group may comply or exercise the right to claim for sale. If financial investors exercise the Drag-Along Right, the Group must exercise the right to claim for sale or guarantee the return on the terms agreed upon by financial investors. (Note 15).

²	The amount includes derivatives separated from convertible bonds issued by the Group (Note 12).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

The valuation gain and loss on financial liabilities at fair value through profit or loss for the six-month periods ended June 30, 2024 and 2023, are as follows:

(In millions of Korean won)

2024

2023

Valuation
gain

Valuation
loss

Valuation
gain

Valuation
loss

Derivatives liabilities held for trading

22,777

—

22,808

7.	Inventories

Inventories as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)
	June 30, 2024							December 31, 2023
	Acquisition cost		Valuation allowance			Carrying amount		Acquisition cost		Valuation allowance			Carrying amount
Merchandise	W	1,011,164		(78,966	)		932,198		981,127		(102,215	)		878,912
Others		31,846		—			31,846		33,350		—			33,350

Total	W	1,043,010		(78,966	)		964,044		1,014,477		(102,215	)		912,262

Cost of inventories recognized as expenses for the six-month period ended June 30, 2024 amounts to W1,687,715 million (For the six-month periods ended June 30, 2023: W 1,574,186 million) and reversal inventory valuation loss amounts to W23,249 million for the six-month period ended June 30, 2024 (For the six-month periods ended June 30, 2023: reversal valuation loss on inventory of W6,683 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

8.	Other Assets and Liabilities

Other assets and liabilities as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Other assets
Advance payments	W	262,255			217,997
Prepaid expenses		231,769			146,628
Contract cost		1,705,013			1,727,468
Contract assets		837,364			832,520
Others		14,372			15,237
Less: Non-current		(815,303	)		(827,297	)

Current	W	2,235,470			2,112,553

Other liabilities
Advances received ¹	W	914,965			582,652
Withholdings		128,198			159,080
Unearned revenue ¹		29,683			27,392
Lease liabilities		1,138,425			1,179,909
Contract liabilities		274,795			278,749
Others		24,031			30,848
Less: Non-current		(872,337	)		(950,015	)

Current	W	1,637,760			1,308,615

¹	The amounts include adjustments arising from adoption of Korean IFRS 1115 Revenue from Contracts with Customers (Note 19).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

9.	Property and Equipment, Investment Properties, and Intangible Assets

(1)

Changes in property and equipment for six-month period ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning, net	W	14,872,079			14,772,179
Acquisition and capital expenditure		1,233,426			1,417,303
Disposal and termination		(38,785	)		(38,069	)
Depreciation		(1,399,430	)		(1,346,129	)
Transfer to investment properties		(43,710	)		(130,250	)
Changes in consolidation scope		(1,326	)		76,631
Impairment		—			(522	)
Others		(30,541	)		(75,579	)

Ending, net	W	14,591,713			14,675,564

Details of properties and equipments and Investment Properties provided as collateral as of June 30, 2024 and December 31, 2023, are as follows:

(In millions of Korean won)

June 30, 2024

Collateral

Carrying
amount

Secured
amount

Related
account

Related
amount

Secured

party

Land and buildings

80,356

65,880

Borrowings

54,900

Industrial Bank of Korea

ShinhanBank

Standard Chartered Bank Korea

Land and Buildings

550,370

66,289

Deposits

56,746

Lessee

(In millions of Korean won)

December 31, 2023

Collateral

Carrying
amount

Secured
amount

Related
account

Related
amount

Secured

party

Land and Buildings

81,057

64,680

Borrowings

54,900

Industrial Bank of Korea/Shinhan Bank/Standard Chartered Bank Korea

Land and Buildings

555,921

64,877

Deposits

55,965

Lessee

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Changes in investment properties for the six-month period ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning, net	W	2,198,135			1,933,358
Acquisition		37,403			61,659
Disposal		(1,772	)		(4,228	)
Depreciation		(26,537	)		(25,325	)
Transfer to investment properties		43,710			130,250
Others		(865	)		(1,922	)

Ending, net	W	2,250,074			2,093,792

As of June 30, 2024, the Group (Lessor) has entered into a non-cancellable operating lease contract for real estate. The future minimum lease payments under this contract amount to W 108,434 million for one year or less, W 131,863 million for more than one year and less than five years, W 14,186 million for over five years, and W 254,483 million in total.

(3)

Changes in intangible assets for the six-month period ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning, net	W	2,533,861			3,129,833
Acquisition and capital expenditure ¹		77,106			236,076
Disposal and termination		(11,797	)		(7,367	)
Amortization		(335,071	)		(386,055	)
Impairment		(857	)		(695	)
Changes in consolidation scope		(9,371	)		6,207
Others		12,445			26,114

Ending, net	W	2,266,316			3,004,113

¹	Amounts include transfers from property and equipment.

The carrying amount of intangible assets with indefinite useful lives, including membership rights (except for goodwill), that are not subject to amortization, is W203,954 million as of June 30, 2024 (December 31, 2023: W212,910 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

Goodwill is allocated to the Group’s cash-generating units, which are identified by operating segments. As of June 30, 2024, the goodwill allocated to each cash-generation unit is as follows:


(In millions of Korean won)
Cash-Generating Unit	Amount
Mobile services	W	65,057
BC Card Co., Ltd.		41,234
HCN Co., Ltd.		128,688
GENIE Music Corporation		50,214
MILLIE Co., Ltd.		54,725
PlayD Co., Ltd.		40,068
KT Telecop Co., Ltd.		15,418
Epsilon Global Communications Pte. Ltd.		49,205
KT MOS Bukbu Co., Ltd. and others		45,840

Total	W	490,449

The recoverable amount of goodwill has been determined based on the fair value obtained by calculating the value in use or deducting the cost of disposal. The value in use was calculated using pre-tax cash flow estimates based on financial budgets, such as the budget for the next five years. Cash flows after the estimated period were estimated using the expected growth rate, and the growth rate does not exceed the long-term average growth rate of the industry to which the cash-generating unit belongs. The Group has determined revenue growth rate based on past performance and expectations of future market changes. The Group has determined pre-tax cash flow estimates based on past earnings and market growth forecasts, and the discount rate used reflects the specific risks associated with related operations.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

10.

Investments in Associates and Joint Ventures

(1)

Details of associates as of June 30, 2024 and December 31, 2023, are as follows:


	Percentage of ownership (%)						Location		Closing month
	June 30, 2024			December 31, 2023			Location		Closing month
KIF Investment Fund		33.3	%		33.3	%		Korea		December
K Bank Inc.		33.7	%		33.7	%		Korea		December
HD Hyundai Robotics Co., Ltd. ¹		10.0	%		10.0	%		Korea		December
Megazone Cloud Corporation ¹		6.8	%		6.8	%		Korea		December
IGIS No. 468-1 General Private Real Estate Investment Company		44.6	%		44.6	%		Korea		December
KT-DSC Creative Economy Youth Start-up Investment Fund		28.6	%		28.6	%		Korea		December
IGIS No. 395 Professional Investors Private Investment Real Estate Investment LLC		35.3	%		35.3	%		Korea		December
LS Marine Solution Co., Ltd.^1,		6.6	%		7.3	%		Korea		December

¹	Although the Group holds less than 20% interest in ordinary share as of June 30, 2024, these entities are included in investments in associates as the Group exerts significant influence over operational and financial policies.

(2)

Changes in investments in associates and joint ventures for the six-month period ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024
	Beginning		Acquisition (Disposal)			Share of net profit (loss) from associates and joint ventures ¹			Others			Ending
KIF Investment Fund	W	177,054		—			579			983			178,616
K Bank Inc.		872,881		—			28,235			1,762			902,878
HD Hyundai Robotics Co., Ltd.		47,734		—			717			(646	)		47,805
Megazone Cloud Corporation		131,694		—			(1,684	)		1,218			131,228
IGIS No. 468-1 General Private Real Estate Investment Company		23,484		—			(53	)		—			23,431
KT-DSC Creative Economy Youth Start-up Investment Fund		25,117		(275	)		(5,817	)		(1,505	)		17,520
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		11,942		—			(1,208	)		—			10,734
LS Marine Solution Co., Ltd.		23,492		—			237			(291	)		23,438
Others¹		243,491		27,186			(13,854	)		273			257,096

Total	W	1,556,889		26,911			7,152			1,794			1,592,746

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	2023
	Beginning		Acquisition (Disposal)			Share of net profit (loss) from associates and joint ventures ¹			Others			Ending
KIF Investment Fund	W	170,979		—			1,122			300			172,401
K Bank Inc.		852,756		—			6,222			10,173			869,151
HD Hyundai Robotics Co., Ltd.		49,372		—			252			(155	)		49,469
Megazone Cloud Corporation		136,199		—			(3,117	)		799			133,881
IGIS No. 468-1 General Private Real Estate Investment Company		23,589		—			(54	)		—			23,535
KT-DSC Creative Economy Youth Start-up Investment Fund		22,123		(500	)		1,985			—			23,608
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		16,620		—			(715	)		—			15,905
Others¹		209,084		39,877			(3,498	)		(7,116	)		238,347

Total	W	1,480,722		39,377			2,197			4,001			1,526,297

KT Investment Co., Ltd., a subsidiary of the Group, recognized net profit (loss) in the investments in associates as operating income. Net profit recognized as operating income for the six-months period ended June 30, 2024 amount to W85 million (six-month period ended June 30, 2023: net profit of W51 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(3)

Summarized statements of financial position of the major associates and joint ventures as of June 30, 2024 and December 31, 2023 and summarized statements of profit or loss for the six-month period ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	June 30, 2024
	Assets		Liabilities		Operating revenue		Profit(loss) for the period
KIF Investment Fund	W	535,848		—		14,380		1,736
K Bank Inc.		24,284,996		22,328,766		569,666		85,989
HD Hyundai Robotics Co., Ltd.		389,364		118,740		111,536		4,175
Megazone Cloud Corporation		1,073,641		480,069		839,184		(6,038	)
IGIS No. 468-1 General Private Real Estate Investment Company		52,498		11		3		(118	)
KT-DSC Creative Economy Youth Start-up Investment Fund		61,724		404		3,994		(20,358	)
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		162,345		114,060		—		(172	)
LS Marine Solution Co., Ltd.		194,799		37,328		52,043		3,821


(In millions of Korean won)	December 31, 2023				June 30, 2023
	Assets		Liabilities		Operating revenue		Profit(loss) for the period
KIF Investment Fund	W	531,163		—		15,474		3,368
K Bank Inc		21,410,602		19,545,592		447,675		23,614
HD Hyundai Robotics Co., Ltd.		386,292		116,332		80,234		(1,427	)
Megazone Cloud Corporation		1,142,383		546,766		710,068		(7,239	)
IGIS No. 468-1 General Private Real Estate Investment Company		52,616		11		3		(121	)
KT-DSC Creative Economy Youth Start-up Investment Fund		88,010		101		10,659		6,948
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		151,459		107,553		—		(154	)
LS Marine Solution Co., Ltd.		147,074		24,113		26,527		6,186

(4)

Due to discontinuance of equity method of accounting, the Group has not recognized loss from associates and joint ventures of W542 million for the six-month period June 30, 2024 (six-month period ended June 30, 2023: W334 million). The unrecognized accumulated comprehensive loss of associates and joint ventures as of June 30, 2024 is W6,724 million (December 31, 2023: W10,748 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

11.

Trade and Other Payables

(1)

Details of trade and other payables as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Current liabilities
Trade payables	W	1,427,914		1,297,752
Other payables		6,624,391		6,757,170

Total	W	8,052,305		8,054,922

Non-current liabilities
Trade payables		922		3,202
Other payables	W	555,314		816,356

Total	W	556,236		819,558

(2)

Details of other payables as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Non-trade payables ¹	W	4,511,468			5,207,165
Accrued expenses		1,586,144			1,267,700
Operating deposits		858,278			880,810
Others		223,815			217,851
Less: non-current		(555,314	)		(816,356	)

Current	W	6,624,391			6,757,170

¹	As of June 30, 2024, credit sale liabilities amounting to W 2,182,324 million (December 31, 2023: W2,314,077 million) held by BC Card Co., Ltd. (a subsidiary of the Group) are included

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

12.

Borrowings

(1)

Details of borrowings as of June 30, 2024 and December 31, 2023, are as follows:

Debentures


(In millions of Korean won and foreign currencies in thousands)			June 30, 2024				December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won
MTNP notes ¹	Sep. 07, 2034	6.500%		USD 100,000	W	138,920		USD 100,000	W	128,940
MTNP notes	Jul. 18, 2026	2.500%		USD 400,000		555,680		USD 400,000		515,760
MTNP notes	Jul. 19, 2024	0.330%		JPY 400,000		3,457		JPY 400,000		3,651
MTNP notes	Sep. 01, 2025	1.000%		USD 400,000		555,680		USD 400,000		515,760
FR notes ²	Nov. 01, 2024	Compounded SOFR+1.210%		USD 350,000		486,220		USD 350,000		451,290
MTNP notes	Jan. 21, 2027	1.375%		USD 300,000		416,760		USD 300,000		386,820
MTNP notes	Aug. 08, 2025	4.000%		USD 500,000		694,600		USD 500,000		644,700
The 183-3rd Public bond	Dec. 22, 2031	4.270%		—		160,000		—		160,000
The 184-3rd Public bond	Apr. 10, 2033	3.170%		—		100,000		—		100,000
The 186-3rd Public bond	Jun. 26, 2024	—		—		—		—		110,000
The 186-4th Public bond	Jun. 26, 2034	3.695%		—		100,000		—		100,000
The 187-3rd Public bond	Sep. 02, 2024	3.314%		—		170,000		—		170,000
The 187-4th Public bond	Sep. 02, 2034	3.546%		—		100,000		—		100,000
The 188-2nd Public bond	Jan. 29, 2025	2.454%		—		240,000		—		240,000
The 188-3rd Public bond	Jan. 29, 2035	2.706%		—		50,000		—		50,000
The 189-3rd Public bond	Jan. 28, 2026	2.203%		—		100,000		—		100,000
The 189-4th Public bond	Jan. 28, 2036	2.351%		—		70,000		—		70,000
The 190-3rd Public bond	Jan. 30, 2028	2.947%		—		170,000		—		170,000
The 190-4th Public bond	Jan. 30, 2038	2.931%		—		70,000		—		70,000
The 191-2nd Public bond	Jan. 15, 2024	—		—		—		—		80,000
The 191-3rd Public bond	Jan. 15, 2029	2.160%		—		110,000		—		110,000
The 191-4th Public bond	Jan. 14, 2039	2.213%		—		90,000		—		90,000
The 192-2nd Public bond	Oct. 11, 2024	1.578%		—		100,000		—		100,000
The 192-3rd Public bond	Oct. 11, 2029	1.622%		—		50,000		—		50,000
The 192-4th Public bond	Oct. 11, 2039	1.674%		—		110,000		—		110,000
The 193-2nd Public bond	Jun. 17, 2025	1.434%		—		70,000		—		70,000
The 193-3rd Public bond	Jun. 17, 2030	1.608%		—		20,000		—		20,000
The 193-4th Public bond	Jun. 15, 2040	1.713%		—		60,000		—		60,000
The 194-1st Public bond	Jan. 26, 2024	—		—		—		—		130,000
The 194-2nd Public bond	Jan. 27, 2026	1.452%		—		140,000		—		140,000
The 194-3rd Public bond	Jan. 27, 2031	1.849%		—		50,000		—		50,000

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won and foreign currencies in thousands)			June 30, 2024				December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won
The 194-4th Public bond	Jan. 25, 2041	1.976%		—		80,000		—		80,000
The 195-1st Public bond	Jun. 10, 2024	—		—		—		—		180,000
The 195-2nd Public bond	Jun. 10, 2026	1.806%		—		80,000		—		80,000
The 195-3rd Public bond	Jun. 10, 2031	2.168%		—		40,000		—		40,000
The 196-1st Public bond	Jan. 27, 2025	2.596%		—		270,000		—		270,000
The 196-2nd Public bond	Jan. 27, 2027	2.637%		—		100,000		—		100,000
The 196-3rd Public bond	Jan. 27, 2032	2.741%		—		30,000		—		30,000
The 197-1st Public bond	Jun. 27, 2025	4.191%		—		280,000		—		280,000
The 197-2nd Public bond	Jun. 29, 2027	4.188%		—		120,000		—		120,000
The 198-1st Public bond	Jan. 10, 2025	3.847%		—		70,000		—		70,000
The 198-2nd Public bond	Jan. 12, 2026	3.869%		—		150,000		—		150,000
The 198-3rd Public bond	Jan. 12, 2028	3.971%		—		80,000		—		80,000
The 199-1st Public bond	Jul. 11, 2025	4.028%		—		85,000		—		85,000
The 199-2nd Public bond	Jul. 10, 2026	4.146%		—		160,000		—		160,000
The 199-3rd Public bond	Jul. 12, 2028	4.221%		—		155,000		—		155,000
The 200-1st Public bond	Feb. 27, 2026	3.552%		—		120,000		—		—
The 200-2nd Public bond	Feb. 26, 2027	3.608%		—		200,000		—		—
The 200-3rd Public bond	Feb. 27, 2029	3.548%		—		80,000		—		—
The 18-1st unsecured bond	Jul. 02, 2024	1.844%		—		100,000		—		100,000
The 18-2nd unsecured bond	Jul. 02, 2026	2.224%		—		50,000		—		50,000
The 19-1nd unsecured bond	Jun. 12, 2027	3.691%		—		50,000		—		—
The 19-2nd unsecured bond	Jun. 12, 2029	3.783%		—		50,000		—		—
The 149-1st Won-denominated unsecured bond	Mar. 08, 2024	—		—		—		—		70,000
The 149-2nd Won-denominated unsecured bond	Mar. 10, 2026	1.756%		—		30,000		—		30,000
The 150-2nd Won-denominated unsecured bond	Apr. 08, 2024	—		—		—		—		30,000
The 151-2nd Won-denominated unsecured bond	May. 14, 2024	—		—		—		—		40,000
The 152-1st Won-denominated unsecured bond	Aug. 30, 2024	1.813%		—		80,000		—		80,000
The 152-2nd Won-denominated unsecured bond	Aug. 28, 2026	1.982%		—		20,000		—		20,000
The 153-2nd Won-denominated unsecured bond	Nov. 11, 2024	2.425%		—		70,000		—		70,000
The 154th Won-denominated unsecured bond	Jan. 23, 2025	2.511%		—		40,000		—		40,000
The 155-1st Won-denominated unsecured bond	Feb. 29, 2024	—		—		—		—		50,000

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won and foreign currencies in thousands)			June 30, 2024				December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won
The 155-2nd Won-denominated unsecured bond	Sep. 02, 2024	2.745%		—		20,000		—		20,000
The 155-3rd Won-denominated unsecured bond	Feb. 28, 2025	2.880%		—		20,000		—		20,000
The 156-1st Won-denominated unsecured bond³	Mar. 25, 2025	5Y CMS+0.404%		—		60,000		—		60,000
The 156-2nd Won-denominated unsecured bond ³	Mar. 25, 2032	10Y CMS+0.965%		—		40,000		—		40,000
The 158th Won-denominated unsecured bond	Jan. 27, 2025	4.421%		—		50,000		—		50,000
The 159-1st Won-denominated unsecured bond	Aug. 09, 2024	4.267%		—		30,000		—		30,000
The 159-2nd Won-denominated unsecured bond	Aug. 11, 2027	4.505%		—		30,000		—		30,000
The 160-1st Won-denominated unsecured bond	Jun. 14, 2024	—		—		—		—		20,000
The 160-2nd Won-denominated unsecured bond	Dec. 13, 2024	5.667%		—		20,000		—		20,000
The 160-3rd Won-denominated unsecured bond	Dec. 12, 2025	5.769%		—		30,000		—		30,000
The 161-1st Won-denominated unsecured bond	Jun. 21, 2024	—		—		—		—		10,000
The 161-2nd Won-denominated unsecured bond	Dec. 20, 2024	5.557%		—		20,000		—		20,000
The 161-3rd Won-denominated unsecured bond	Jun. 20, 2025	5.594%		—		30,000		—		30,000
The 161-4th Won-denominated unsecured bond	Dec. 22, 2025	5.615%		—		10,000		—		10,000
The 162-2nd Won-denominated unsecured bond	Jan. 26, 2024	—		—		—		—		40,000
The 162-3rd Won-denominated unsecured bond	Apr. 26, 2024	—		—		—		—		10,000
The 163-1st Won-denominated unsecured bond	Feb. 20, 2026	4.059%		—		20,000		—		20,000

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won and foreign currencies in thousands)			June 30, 2024				December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won
The 163-2nd Won-denominated unsecured bond	Feb. 22, 2028	4.311%		—		80,000		—		80,000
The 164-1st Won-denominated unsecured bond	Apr. 12, 2024	—		—		—		—		10,000
The 164-2nd Won-denominated unsecured bond	Oct. 24, 2024	3.821%		—		30,000		—		30,000
The 164-3rd Won-denominated unsecured bond	Apr. 14, 2028	4.220%		—		30,000		—		30,000
The 165-1st Won-denominated unsecured bond	May. 09, 2025	3.870%		—		30,000		—		30,000
The 165-2nd Won-denominated unsecured bond	Nov. 09, 2026	3.932%		—		10,000		—		10,000
The 165-3rd Won-denominated unsecured bond	May. 07, 2027	3.972%		—		30,000		—		30,000
The 166-1st Won-denominated unsecured bond	Nov. 22, 2024	4.205%		—		20,000		—		20,000
The 166-2nd Won-denominated unsecured bond	Apr. 22, 2025	4.310%		—		40,000		—		40,000
The 166-3rd Won-denominated unsecured bond	May. 21, 2025	4.332%		—		10,000		—		10,000
The 166-4th Won-denominated unsecured bond	May. 22, 2025	4.332%		—		40,000		—		40,000
The 167-1st Won-denominated unsecured bond	Dec. 20, 2024	3.865%		—		30,000		—		30,000
The 167-2nd Won-denominated unsecured bond	Jan. 22, 2025	3.864%		—		50,000		—		50,000
The 167-3rd Won-denominated unsecured bond	Feb. 21, 2025	3.864%		—		10,000		—		10,000
The 167-4th Won-denominated unsecured bond	Dec. 22, 2025	3.858%		—		10,000		—		10,000
The 168-1st Won-denominated unsecured bond	Jun. 05, 2025	3.687%		—		40,000		—		—
The 168-2nd Won-denominated unsecured bond	Aug. 06, 2025	3.703%		—		70,000		—		—

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won and foreign currencies in thousands)			June 30, 2024					December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won			Foreign currency		Korean won
The 168-3rd Won-denominated unsecured bond	Oct. 02, 2025	3.724%		—		40,000			—		—
The 169th Won-denominated unsecured bond	Apr. 04, 2025	3.671%		—		50,000			—		—
The 170th Won-denominated unsecured bond	Jun. 12, 2025	3.688%		—		50,000			—		—

Subtotal						8,621,317					8,446,921
Less: Current portion						(2,578,761	)				(1,924,523	)
Discount on bonds						(18,262	)				(19,248	)

Total					W	6,024,294				W	6,503,150

As of June 30, 2024, the Controlling Company has outstanding notes in the amount of USD 100 million with fixed interest rates under Medium Term Note Program (“MTNP”) registered on the Singapore Stock Exchange, which allowed issuance of notes of up to USD 2,000 million. However, the MTNP has been terminated since 2007.

²	The Daily SOFR is approximately 5.330% as of June 30, 2024.

³	The CMS (5Y) and CMS (10Y) is approximately 3.145% and 3.150%, respectively as of June 30, 2024.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

Convertible bonds


(In millions of Korean won)
Type	Issuance Date		Maturity		Annual interest Rate		June 30, 2024			December 31, 2023
The 1st CB (Private) ¹		Jun. 5, 2020		Jun. 5, 2025		²	W	8,000			8,000
Redemption premium								2,267			2,267
Conversion rights adjustment								(1,220	)		(1,811	)

Subtotal								9,047			8,456
Less: Current portion								(9,047	)		(8,456	)

Total							W	—			—

¹	Common shares of Storywiz are subject to conversion (appraisal period: June 5, 2021~May 4, 2025).

²	Nominal interest rate and maturity yield is approximately 0% and 5%, respectively, and will be settled on maturity.

Borrowings

Short-term borrowings


(In millions of Korean won)
					June 30, 2024				December 31, 2023
Type	Financial institution		Annual interest rates		Foreign currency		Korean won		Foreign currency		Korean won
Operational						—	W	71,000		—	W	151,500
		Shinhan Bank		4.370%~6.200%		—		91,890		—		70,000
				4.400%~5.490%		—		—		—		20,000
		Woori Bank		—
		Korea Development Bank		4.680%~6.060%		—		14,500		—		34,900
		Industrial Bank of Korea		4.862%		—		6,000		—		6,000
				—		—		—		—		4,800
		Hana Bank		4.280%		—		28,000		—		—
		KB SECURITIES		3.810%~3.820%		—		80,000		—		69,635
		HSBC		—		—		—		USD 23,600		30,450
				—		—		—		—		8,500
		NongHyup Bank¹		KORIBOR(1M)+1.230%		—		4,300		—		—
		Korea Investment		3.810%		—		20,000		—		30,000
		NH INVESTMENT & SECURITIE		3.820%		—		20,000		—		—

		HANYANG SECURITIE		3.690%		—		99,210		—		—
Total							W	434,900			W	425,785

¹	The KORIBOR(1M) is approximately 3.540% as of June 30, 2024.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

Long-term borrowings


(In millions of Korean won and thousands of foreign currencies)				June 30, 2024					December 31, 2023
Financial institution	Type		Annual interest rates	Foreign currency		Korean won			Foreign currency		Korean won
Export-Import Bank of Korea		Inter-Korean Cooperation Fund¹	1.00%		—	W	1,234			—	W	1,480
CA-CIB		General loans	3.380%		—		100,000			—		200,000
JPM		General loans	2.700%		—		100,000			—		200,000
DBS		General loans	3.820%		—		100,000			—		100,000
		General loans	4.090%		—		100,000			—		—
		General loans²	Term SOFR(3M)+1.700%		USD 8,910		12,378			USD 8,910		11,489
		General loans	2.630%~3.230%		USD 27,002		37,453			USD 31,472		40,655
Shinhan Bank		General loans ³	4.490%		—		62,398			—		62,398
		General loans ²	Term SOFR(3M)+1.600%		USD 21,127		29,349			USD 21,127		27,241
		General loans ²	Term SOFR(3M)+1.940%		USD 35,000		48,622			USD 35,000		45,129
		General loans ²	CD(91D)+1.800%		—		16,900			—		16,900
Woori Bank		General loans ²	EURIBOR(3M)+0.900%		EUR 7,700		11,450			EUR 7,700		10,985
		General loans	3.320%~5.310%		—		41,526			—		41,526
Hi Investment & Securities		CP	2.302%		—		94,150			—		92,994
Bookook Investment		CP	3.603%		—		9,836			—		19,525
Korea Investment		CP	3.622%		—		77,416			—		75,928
Korea Development Bank		General loans	4.740%~4.960%		—		33,000			—		137,000
KDB Bank Uzbekistan		loans⁴	23.000%		UZS 44,989,915		4,950			—		—
		loans⁴	10.300%		USD 5,400		7,522			—		—
NH Jayang		PF loans²	CD(91D)+1.150%		—		31,166			—		53,033
Kyobo Life Insurance		PF loans²	CD(91D)+1.150%~ CD(91D)+3.450%		—		64,905			—		84,586
Standard Chartered Bank Korea		PF loans²	CD(91D)+1.150%~ CD(91D)+3.450%		—		43,270			—		56,390
		General loans ²	CD(91D)+0.750%		—		32,000			—		32,000
Samsung Life Insurance		PF loans	1.860%~4.160%		—		36,058			—		46,992
Kookmin Bank		General loans	4.750%		—		8,000			—		—

Subtotal							1,103,583					1,356,251
Less: Current portion							(572,298	)				(699,800	)

Total						W	531,285				W	656,451

¹	The above Inter-Korean Cooperation Fund is repayable in installments over 13 years after a 7-year grace period.

²	EURIBOR (3M), Term SOFR (3M) and CD (91D) are approximately 3.711%, 5.325%, 3.600% respectively, as of June 30, 2024.

³	The general loans are repayable in installments over 4 years after a three-year grace period.

⁴	The general loans are repayable in installments over 3 years after a two-year grace period.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Repayment schedule of the Group’s debentures and borrowings including the portion of current liabilities as of June 30, 2024, is as follows:


(In millions of Korean won)
	Bonds						Borrowings						Total
	In local currency		In foreign currency		Sub- total		In local currency		In foreign currency		Sub- total		Total
Jul. 1, 2024 ~ Jun. 30, 2025	W	2,098,000		489,677		2,587,677		867,942		139,256		1,007,198		3,594,875
Julr. 1, 2025 ~ Jun. 31, 2026		935,000		1,250,280		2,185,280		46,719		—		46,719		2,231,999
Jul. 1, 2026 ~ Jun. 31, 2027		740,000		972,440		1,712,440		136,997		4,157		141,154		1,853,594
Jul. 1, 2027 ~ Jun. 31, 2028		390,000		—		390,000		15,600		4,156		19,756		409,756
After Jul. 1, 2028		1,615,000		138,920		1,753,920		319,499		4,157		323,656		2,077,576

Total	W	5,778,000		2,851,317		8,629,317		1,386,757		151,726		1,538,483		10,167,800

13.

Provisions

Changes in provisions the six-month period ended June 30, 2024 and 2023, are as follows:


	2024
(In millions of Korean won)	Litigation			Restoration cost			Others			Total
Beginning balance	W	29,707			133,159			59,357			222,223
Increase (transfer)		(194	)		3,287			3,888			6,981
Usage		(3,389	)		(738	)		(3,816	)		(7,943	)
Reversal		(3,102	)		(491	)		(394	)		(3,987	)

Ending balance	W	23,022			135,217			59,035			217,274

Less: Current	W	(22,990	)		(23,869	)		(58,995	)		(105,854	)
Non-current		32			111,348			40			111,420


	2023
(In millions of Korean won)	Litigation			Restoration cost			Others			Total
Beginning balance	W	36,329			108,962			55,075			200,366
Increase (transfer)		40			13,835			4,124			17,999
Usage		(262	)		(602	)		(2,003	)		(2,867	)
Reversal		—			(561	)		(51	)		(612	)
Others		—			(445	)		445			—

Ending balance	W	36,107			121,189			57,590			214,886

Less: Current	W	34,532			20,556			57,172			112,260
Non-current		1,575			100,633			418			102,626

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

14.

Net Defined Benefit Liabilities (Assets)

(1)

The amounts recognized in the statements of financial position as of June 30, 2024 and December 31, 2023, are determined as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Present value of defined benefit obligations	W	2,452,769			2,365,793
Fair value of plan assets		(2,472,114	)		(2,462,925	)

Liabilities	W	73,113			63,616

Assets	W	92,458			160,748

(2)

Changes in the defined benefit obligations for the six-month period ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning	W	2,365,793			2,218,655
Current service cost		109,967			105,230
Interest expense		41,963			49,252
Benefit paid		(67,381	)		(58,602	)
Remeasurements:		2,990			5,045
Changes in scope of consolidation		(422	)		427
Others		(141	)		140

Ending	W	2,452,769			2,320,147

(3)

Changes in the fair value of plan assets for the six-month period ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning	W	2,462,925			2,478,143
Interest income		45,631			57,257
Remeasurements on plan assets:		220			3,777
Employer contributions		5,609			1,558
Benefits paid		(70,052	)		(44,586	)
Changes in scope of consolidation		—			339
Others		27,781			21,595

Ending	W	2,472,114			2,518,083

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(4)

Amounts recognized in the consolidated statement of profit or loss for the six-month period ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Current service cost	W	109,967			105,230
Net interest expense		(3,668	)		(8,005	)
Transfer out		(7,556	)		(5,437	)

Total expenses	W	98,743			91,788

15.

Commitments and Contingencies

(1)

As of June 30, 2024, major commitments with local financial institutions are as follows:


(In millions of Korean won and foreign currencies in thousands)	Financial institution	Limit		Used amount
Bank overdraft	Kookmin Bank and others		374,000		—
Inter-Korean Cooperation Fund	Export-Import Bank of Korea		37,700		1,234
Economic Cooperation Business Insurance	Export-Import Bank of Korea		3,240		1,732
Collateralized loan on electronic accounts receivable-trade	Kookmin Bank and others		545,350		41,524
Plus electronic notes payable	Industrial Bank of Korea		50,000		3,370
	Korea Development Bank and others		1,593,500		246,790
Working capital loan	Shinhan Bank		USD 92,039		USD 92,039
	Woori Bank		EUR 7,700		EUR 7,700
Facility loans	Shinhan Bank and others		824,000		264,324
Derivatives transaction limit	Korea Development Bank and others		USD 1,970,000		USD 1,970,000

	Citi Bank		JPY 400,000		JPY 400,000
Total	KRW		3,427,790		558,974
	USD		2,062,039		2,062,039
	EUR		7,700		7,700
	JPY		400,000		400,000

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

As of June 30, 2024, guarantees received from financial institutions are as follows:


(In millions of Korean won and foreign currencies in thousands)	Financial institution	Limit
	Guarantee for payment in Korean currency		4,000
	Comprehensive credit line and others		3,100
Hana Bank	Guarantee for payment in foreign currency	USD	59
	Comprehensive credit line and others	USD	10,300
Kookmin Bank	Guarantee for payment in foreign currency	USD	3,186
Shinhan Bank	Guarantee for payment in foreign currency and others	USD	89,516
	Corporate card issuance guarantee	VND	222,914
Woori Bank	Guarantee for payment in Korean currency		5,100
	Guarantee for payment in foreign currency	USD	5,360
Korea Development Bank	Refund guarantee for advances received	USD	6,811
HSBC	Guarantees for depositions	USD	808
Seoul Guarantee Insurance Company	Performance guarantee and others		345,812
Korea Software Financial Cooperative	Performance guarantee and others		1,417,465
Korea Specialty Contractor Financial Cooperative	Performance guarantee and others		135
Korea Housing Finance Corporation	Performance guarantee and others		44,000
Korea Housing & Urban Guarantee Corporation¹	Performance guarantee and others		691,530
Information & Communication Financial Cooperative	Performance guarantee and others		81,865

Total	KRW		2,593,007
	USD		116,040
	VND		222,914

¹	Inventory assets (W303,717 million) and investment properties (W317,323 million) are provided as collateral with commitment respectively, as of June 30, 2024.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(3)

As of June 30, 2024, guarantees provided by the Group to third parties are as follows:

(In millions of Korean won)

Subject to payment guarantees

Creditor

Limit

Used
amount

Period

KT Estate Inc

Wonju Bando U-bora Mark Bridge Buyer

Hana Bank

103,000

68,761

Aug. 5, 2022 ~

Feb. 28, 2025

KT Engineering Co., Ltd.¹

Gasan Solar Power Plant Inc.

Shinhan Bank

4,700

196

Jan. 7, 2010 ~

Jan. 8, 2025

KT Alpha Co., Ltd.

Cash payers

T-commerce

cash payers

710

—

Apr. 14, 2024 ~

Apr. 12, 2025

Nasmedia Co., Ltd.

Stockholders Association Members

Korea Securities
Finance Corp

754

256

—

¹	KT Engineering Co., Ltd., a subsidiary of the Group, is subject to payment, depending on the reimbursement of principal debtor.

(4)

The Controlling Company is jointly and severally obligated with KT Sat Co., Ltd., a subsidiary, to pay KT Sat Co., Ltd.’s liabilities incurred prior to spin-off. As of June 30, 2024, the Controlling Company and KT Sat Co., Ltd. are jointly and severally liable for reimbursement of W434 million.

(5)

For the six-month period ended June 30, 2024, the Group entered into agreements with the Securitization Specialty Companies (2024: First 5G 73^rd to 75^th Securitization Specialty Co., Ltd., 2023: First 5G 67^thto 72^nd Securitization Specialty Co., Ltd.) and disposed of its trade receivables related to handset sales. The Group also made asset management agreements with each securitization specialty company and in accordance with the agreement, the Group will receive asset management fees upon liquidation of the securitization specialty company.

(6)

As of June 30, 2024, the Group is a defendant in 181 lawsuits with the total claimed amount of W 169,028 million (As of December 31, 2023: W167,834 million). As of June 30, 2024, litigation provisions of W23,022 million for pending lawsuits and unasserted claims are recorded as liabilities for potential loss in the ordinary course of business. The final outcomes of the cases cannot be estimated as of June 30, 2024 (Note 13).

(7)

According to the financial and other covenants included in certain debentures and borrowings, the Group is required to maintain certain financial ratios such as debt-to-equity ratio, use the funds for the designated purpose and report to the creditors periodically. The covenant also contains restriction on provision of additional collateral and disposal of certain assets.

(8)

As of June 30, 2024, the Group participates in Algerie Sidi Abdela new town development consortium (percentage of ownership: 2.5%) and has joint liability with other consortium participants.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(9)

As of June 30, 2024, the contract amount of properties and equipments acquisition agreement made but not yet recognized amounts to W383,855 million (As of December 31, 2023: W489,231 million).

(10)

As of June 30, 2024, there are derivatives generated by the Group granting Drag-Along Right to financial investors participating in paid-in capital increase of K Bank Inc. (Note 6).

(11)

The Group has an agreement with a transferor participated in share transfer agreement of MILLE Co., Ltd. As per the conditions of the agreement, the founding shareholders and others can exercise Put Option for the ordinary shares they hold, and it was exercised during the six-month period ended June 30, 2024.

(12)

The Group entered into an agreement with financial investors of Epsilon Global Communications Pte regarding the acquisition of shares contract. If certain conditions are not met in the future as disclosed in the terms and conditions of the agreement, financial investors may exercise Tag-Along Right, Drag-Along Right, and the right to sell shares for the convertible preferred shares they hold (Note 6).

(13)

The Group has an obligation for additional contributions as per agreement to Storm Ventures FUND VII and others. As of June 30, 2024, remaining amounts of USD 33,900 thousand and JPY 320,000 thousand will be invested through the Capital Call method in the future.

(14)

The Group has the amount of W201,615 million (40%) of joint responsibility obligation and W302,423 million (60%) of obligation to provide financial support as a construction investor during the construction period with respect to K Defense Co., Ltd. established in accordance with the Private Investment Act on Social Infrastructure. During the operating period, the Group has the amount of W438,312 million (100%) of obligation to provide financial support as an operating investor.

(15)

The Group entered into a stock sale contract with HYUNDAI MOBIS and HYUNDAI MOTOR COMPANY. If a certain period of time has elapsed from the date of the contract and the acquired stocks are to be disposed to a third party, HYUNDAI MOBIS and HYUND AI MOTOR COMPANY may exercise a preferential purchase right to designate a buyer with priority.

(16)

The Group entered into an agreement with LS Cable & System Ltd., which participated in the stock acquisition contract of LS Marine Solution Co., Ltd. Under the agreement, the Group may exercise a Put-Option to LS Cable & System Ltd in the future (Note 6).

(17)

During the prior period, the Group entered into an agreement with equity investor who participated in the equity acquisition contract of KT Cloud Co., Ltd. According to this agreement, in specific occasion, the financial investor may exercise a Tag-Along of common shares or a Put-Option to the Group in the future. In relation to this contract, the Group and the financial investor may settle mutual profits if there is a difference between the final public offering price and the preliminary public offering price (Note 6).

(18)

The Group has the obligation of paying Minimum Guarantee as utilizing product bundling of Tving Co., Ltd., and the right to be paid certain proportion of the excess as per agreement.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

16.

Leases

Information for leases when the Group acts as a lessee is as follows. Information on leases when the Group acts as a lessor is described in Note 9.

(1)

Amounts recognized in the consolidated statement of financial position

The consolidated statements of financial position shows the following amounts relating to leases:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Right-of-use assets
Property and building	W	984,537		1,019,537
Machinery and communication line facilities		109,985		89,150
Others		192,159		196,276

Total	W	1,286,681		1,304,963


(In millions of Korean won)	June 30, 2024		December 31, 2023
Lease liabilities¹
Current	W	333,378		307,868
Non-current		805,047		872,042

Total	W	1,138,425		1,179,910

¹	Included in the line item ‘other current liabilities and other non-current liabilities’ in the consolidated statements of financial position (Note 8).

Right-of-use assets related to leases increased by W171,613 million and W185,196 million for the six-month period ended June 30, 2024, and 2023, respectively.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Amounts recognized in the consolidated statement of profit or loss

The consolidated statement of profit or loss relating to leases for the six-month period June 30, 2024, and 2023, are as follows:


(In millions of Korean won)	2024		2023
Depreciation of right-of-use assets
Property and building	W	149,095		149,002
Machinery and communication line facilities		12,875		13,390
Others		44,221		34,754

Total	W	206,191		197,146

Depreciation of investment property		—		1
Interest expense relating to lease liabilities	W	25,198		25,402
Expense relating to short-term leases		2,908		6,336
Expense relating to leases of low-value assets that are not short-term leases		6,826		11,535
Expense relating to variable lease payments not included in lease liabilities		7,188		4,198

Total cash outflow from leases was W242,236 million and W253,730 million for the six-month periods ended June 30, 2024 and 2023, respectively.

17.

Retained Earnings

Details of retained earnings as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Legal reserve ¹	W	782,249		782,249
Voluntary reserves ²		4,651,362		4,651,362
Unappropriated retained earnings		9,019,049		9,060,819

Total	W	14,452,660		14,494,430

The Commercial Code of the Republic of Korea requires the Controlling Company to appropriate, as a legal reserve, an amount equal to a minimum of 10% of cash dividends paid until such reserve equals 50% of its issued share capital. The reserve is not available for the payment of cash dividends but may be transferred to share capital with the approval of the Controlling Company’s Board of Directors or used to reduce accumulated deficit, if any, with the ratification of the Controlling Company’s majority shareholders.

The reserves of research and development of human resources in other surplus reserves are separately accumulated on disposal of retained earnings on tax filing adjustments when calculating income taxes in accordance with regulations of Tax Reduction and Exemption Control Act of Korea. Reversal of the reserves according to the relevant tax law can be paid out as dividends.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

18.

Other Components of Equity

(1)

The Group’s other components of equity, as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Treasury stock	W	(215,459	)		(398,075	)
Gain on disposal of treasury stock		2,850			3,220
Share-based compensation		4,486			8,773
Equity transactions within consolidated entities ¹		(429,054	)		(416,336	)

Total	W	(637,177	)		(802,418	)

¹	Profit or loss incurred from transactions with non-controlling interest and investment difference incurred from change in proportion of subsidiaries are included.

(2)

As of June 30, 2024 and December 31, 2023, the details of treasury stock, are as follows:


	June 30, 2024		December 31, 2023
Number of shares (in shares)		6,195,910		11,447,338
Amount (in millions of Korean won)	W	215,459		398,075

Treasury stock held as of June 30, 2024, is expected to be utilized for stock compensation for the Group’s directors, employees, and for other purposes.

19.

Revenue from Contracts with Customers and Relevant Contract Assets and Liabilities

(1)

The Group has recognized the following amounts relating to revenue for three- and the six-month periods ended June 30, 2024 and 2023:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Revenue from contracts with customers	W	6,489,158		13,087,000		6,490,230		12,879,571
Revenue from other sources		57,241		113,973		57,291		111,626

Total	W	6,546,399		13,200,973		6,547,521		12,991,197

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Operating revenues for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Services provided	W	5,776,645		11,499,295		5,834,448		11,431,988
Sales of goods		769,754		1,701,678		713,073		1,559,209

Total	W	6,546,399		13,200,973		6,547,521		12,991,197

Revenue from providing services is recognized over time and revenue from sales of goods are recognized at a point in time. Revenues from construction commitments included in sales of goods are recognized using the percentage of completion method.

(3)

The contract assets, liabilities and deferred revenue recognized in relation to the revenues from contracts with customers are as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Contract assets ¹	W	1,111,507		1,130,745
Contract liabilities ¹		307,419		311,023
Deferred revenue ²		85,202		81,067

The Group recognized contract assets of W274,143 million and contract liabilities of W32,624 million for long-term construction contract as of June 30, 2024 (December 31, 2023: contract assets of 308,821 million and contract liabilities of W32,274 million). The Group recognizes contract assets as trade receivables and other receivables, and contract liabilities as other current liabilities.

²	Deferred revenue related to government grant is excluded.

(4)

The contract costs recognized as assets are as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Incremental costs of obtaining a contract	W	1,633,564		1,656,711
Cost of contract performance		71,448		70,757

Total	W	1,705,012		1,727,468

As of June 30, 2024, the Group recognized contract assets in the amount of W857,847 million as operating expenses (June 30, 2023: W888,317 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(5)

For the three- and six-month periods ended June 30, 2024 and 2023, revenue recognized from carried-forward contract liabilities and deferred revenue from prior year, is as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Revenue recognized from the beginning balance of contract liabilities
Allocation of the transaction price	W	47,225		115,785		59,902		134,898
Deferred revenue of joining/installment fees		10,835		22,704		11,016		23,208

Total	W	58,060		138,489		70,918		158,106

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

20.

Operating Expenses

(1)

Operating expenses for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024						2023
	Three-month			Six-month			Three-month		Six-month
Salaries and wages	W	1,213,152			2,314,075			1,131456		2,200,537
Depreciation		700,943			1,404,779			675,525		1,347,057
Depreciation of right-of-use assets		103,285			206,191			97,717		197,146
Amortization of intangible assets		161,938			328,881			155,948		314,430
Commissions		332,380			685,388			298,182		600,587
Interconnection charges		102,165			212,091			109,660		220,898
International interconnection fees		26,425			63,285			44,244		92,018
Purchase of inventories		823,891			1,716,248			540,295		1,495,233
Changes of inventories		(64,906	)		(51,782	)		142,661		72,270
Sales promotion expense and sales commissions		554,351			1,120,721			600,486		1,165,094
Service costs		504,760			1,066,801			491,994		1,037,326
Utilities		130,059			264,430			89,160		192,477
Taxes and dues		64,437			129,728			63,368		128,582
Rent		39,043			76,181			41,725		81,475
Insurance premiums		13,504			31,641			14,427		32,270
Installation fees		42,220			80,051			38,049		91,349
Advertising expenses		40,754			72,809			40,145		75,460
Research and development expenses		43,144			94,178			41,690		84,525
Card service costs		771,019			1,512,921			825,748		1,584,610
Others		449,849			871,870			528,933		915,640

Total	W	6,052,413			12,200,487			5,971,413		11,928,984

(2)

Details of employee benefits for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Short-term employee benefits	W	1,132,289		2,152,008		1,054,610		2,049,482
Post-employment benefits (defined benefits)		49,256		98,743		46,314		91,788
Post-employment benefits (defined contributions)		24,460		45,989		18,953		40,467
Share-based compensation		929		3,848		6,417		9,338
Others		6,218		13,487		5,162		9,462

Total	W	1,213,152		2,314,075		1,131,456		2,200,537

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

21.

Other Income and Other Expenses

(1)

Other income for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Gain on disposal of property and equipment and investment properties	W	5,167		22,484		5,007		12,617
Gain on disposal of intangible assets		—		112		—		300
Gain on disposal of right-of-use assets		1,236		1,527		1,496		1,861
Compensation on impairment of property and equipment		35,515		65,600		37,836		69,848
Gain on government subsidies		4,856		14,207		7,957		17,359
Gain on disposal of investments in associates		1,106		1,106		2,880		6,054
Gain on disposal of subsidiaries		52,688		52,688		—		—
Others		6,891		22,573		7,769		23,892

Total	W	107,459		180,297		62,945		131,931

(2)

Other expenses for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Loss on disposal of property and equipment	W	20,701		36,345		19,125		31,900
Loss on disposal of intangible assets		1,744		7,839		2,456		3,026
Loss on disposal of right-of-use assets		981		1,275		719		949
Loss on disposal of investments in associates		12		12		—		—
Loss on disposal of subsidiaries		3,154		3,154		—		—
Donations		573		4,326		411		17,261
Other allowance for bad debts		11,214		21,119		7,640		11,651
Others		9,648		44,329		44,048		69,849

Total	W	48,027		118,399		74,399		134,636

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

22.

Finance Income and Costs

(1)

Details of finance income for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Interest income	W	78,728		156,475		63,542		131,736
Gain on foreign currency transactions		5,111		7,908		5,728		10,671
Gain on foreign currency translation		16,472		20,915		8,913		14,482
Gain on transaction of derivatives		3,209		3,209		3,159		4,771
Gain on valuation of derivatives		100,289		229,833		7,434		97,891
Gain on disposal of trade receivables		—		—		3,441		3,441
Divided income		11,166		42,212		33,034		34,322
Others		3,381		8,080		775		2,046

Total	W	218,356		468,632		126,026		299,360

(2)

Details of finance costs for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Interest expenses	W	91,039		194,863		92,158		170,865
Loss on foreign currency transactions		3,792		6,038		8,442		15,861
Loss on foreign currency translation		96,714		226,252		22,569		125,617
Loss on valuation of derivatives		261		354		2,784		18,749
Loss on disposal of trade receivables		3,227		3,589		2,129		7,065
Others		16,999		21,428		20,416		37,122

Total	W	212,032		452,524		148,498		375,279

23.

Income Tax Expense

Income tax expense is recognized based on the best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual income tax rate used for the year ending December 31, 2024, is 26.0%.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

24.

Earnings per Share

Basic earnings per share for the three- and six-month periods ended June 30, 2024 and 2023, are calculated as follows:

(1)

Basic Earnings per Share

Basic earnings per share is calculated by dividing the profit for the period by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares held by the Group as treasury stock.


	2024				2023
	Three-month		Six-month		Three-month		Six-month
Profit attributable to ordinary shares (In millions of Korean won)	W	392,764		768,038		394,248		690,580
Weighted average number of ordinary shares outstanding (In number of shares)		245,756,858		245,993,685		249,590,243		252,588,199

Basic earnings per share (In Korean won)	W	1,598		3,122		1,580		2,734

(2)

Diluted Earnings per Share

Diluted earnings per share from operations is calculated by adjusting the weighted average number of ordinary shares outstanding assuming that all dilutive potential ordinary shares are converted into ordinary shares. The Group has dilutive potential ordinary shares from convertible bonds, convertible preferred stock and other share-based payments:


	2024						2023
	Three-month			Six-month			Three-month			Six-month
Profit attributable to ordinary shares (In millions of Korean won)	W	392,764			768,038			394,248			690,580
Adjusted net income attributable to ordinary shares (In millions of Korean won)		(142	)		(241	)		(256	)		(443	)
Diluted profit attributable to ordinary shares (In millions of Korean won)		392,622			767,797			393,992			690,137
Number of dilutive potential ordinary shares outstanding (In number of shares)		25,111			66,620			135,219			123,912
Weighted average number of ordinary shares outstanding (In number of shares)		245,781,969			246,060,305			249,725,462			252,712,111

Diluted earnings per share (In Korean won)	W	1,597			3,120			1,578			2,731

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

Diluted earnings per share is calculated by dividing the profit for the period by the sum of the weighted average number of ordinary shares and dilutive potential ordinary shares. This calculation takes into account both ordinary shares and all dilutive potential shares

25.

Cash Generated from Operations

(1)

Cash flows from operating activities for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
1. Profit for the period	W	803,544			742,127
2. Adjustments for:
Income tax expense		282,153			243,609
Interest income ¹		(209,382	)		(186,786	)
Interest expense ¹		222,652			197,753
Dividend income ²		(43,637	)		(35,758	)
Depreciation		1,425,967			1,371,454
Amortization of intangible assets		335,071			386,055
Depreciation of right-of-use assets		206,191			197,146
Provisions for post-employment benefits (defined benefits)		106,299			97,225
Allowance for bad debts		104,814			79,106
Share of net profit or loss of associates and joint ventures		(7,290	)		(2,197	)
Gain on disposal of associates and joint ventures		(50,628	)		(6,054	)
Loss on disposal of property, equipment and investment properties ³		13,861			8,741
Impairment loss on property and equipment		—			522
Gain on disposal of right-of-use assets		(252	)		(912	)
Loss on disposal of intangible assets		7,727			2,726
Impairment loss on intangible assets		857			695
Loss on foreign currency translation		205,180			111,135
Gain on valuation of derivatives		(232,719	)		(61,657	)
Loss on disposal of financial assets at amortized cost		1			1
Gain on disposal of financial assets at fair value through profit or loss		(3,440	)		(908	)
Loss on valuation of financial assets at fair value through profit or loss ⁴		8,672			2,821
Others		66,719			71,256
3. Changes in operating assets and liabilities
Decrease (increase) in trade receivables		(108,465	)		5,765
Decrease in other receivables		84,990			436,030
Increase in other current assets		(49,235	)		(43,890	)
Increase in other non-current assets		(19,669	)		(32,768	)
Decrease (Increase) in inventories		(41,734	)		69,973
Increase (decrease) in trade payables		79,917			(15,205	)
Increase (decrease) in other payables		38,331			(651,115	)
Increase (decrease) in other current liabilities		260,749			(56,394	)
Decrease in other non-current liabilities		(11,142	)		(18,017	)
Increase (Decrease) in provisions		(2,640	)		2,885
Increase (Decrease) in deferred revenue		(882	)		639
Decrease in plan assets		158,417			115,748
Payment of post-employment benefits (defined benefit)		(202,374	)		(167,452	)

4. Cash generated from operations (1+2+3)		3,428,623			2,864,299

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

Subsidiaries such as BC Card Co., Ltd. recognize interest income and expense as operating revenue and expense, respectively. Interest income of W52,907 million (For the six-month period ended June 30, 2023: W55,050 million) recognized as operating revenue and interest expense of W27,789 million (For the six-month periods ended June 30, 2023: W27,778 million) recognized as operating expense, for the six-month period ended June 30, 2024, are included in the adjustment.

²	BC Card Co., Ltd. recognized dividend income as operating revenue. Dividend income of W1,425 million recognized as operating revenue for the six-month period ended June 30, 2024 (six-month period ended June 30, 2023: W1,426 million) is included in the adjustment.

Gains and losses on disposal of investment properties of KT Estate Inc. are presented as operating revenue and operating expense, respectively. Gain on disposal of investment properties amounting to: W10,542 million, recognized as operating revenue for the six-month period ended June 30, 2023, is included.

⁴

Subsidiaries such as KT Investment Co., Ltd. recognized gain and loss on valuation of financial assets at fair value through profit or loss as operating revenue and expense, respectively. Loss on valuation of financial assets at fair value through profit or loss of W1,141 million (For the six-month period ended June 30, 2023: gain on valuation of financial assets at fair value through profit or loss of W11,727 million) that is recognized as operating revenue and expense, for the six-month period ended June 30, 2024, is included in the adjustment.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Significant transactions not affecting cash flows for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Reclassification of current portion of borrowings	W	1,827,739			1,286,741
Reclassification of construction-in-progress to property and equipment		979,155			1,343,059
Change of other payables relating to acquisition of property and equipment		66,921			(211,861	)
Change of other payables relating to acquisition of intangible assets		(285,805	)		(235,761	)
Reclassification of other payables from net defined benefit liabilities		(14,648	)		(13,014	)
Increase in financial assets due to stock exchange		52,841			—

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

26.

Changes in Liabilities Arising from Financing Activities

Details of changes in liabilities arising from financing activities, liabilities related to cashflow to be classified as future financing activities, for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024

	Beginning			Cash flows			Others											Ending
	Beginning			Cash flows			Acquisition		Changes in FX rate			Fair value change			Other changes			Ending
Borrowings	W	10,218,165			(281,451	)		—		213,500			—			371			10,150,585
Lease liabilities		1,179,909			(200,555	)		180,971		—			264			(22,164	)		1,138,425
Derivative liabilities		24,547			—			—		193			(639	)		(22,417	)		1,684
Derivative assets		(159,211	)		1,118			—		(196,606	)		7,437			22,417			(324,845	)

Total	W	11,263,410			(480,888	)		180,971		17,087			7,062			(21,793	)		10,965,849


(In millions of Korean won)	2023

	Beginning			Cash flows			Others										Ending
	Beginning			Cash flows			Acquisition		Changes in FX rate			Fair value change		Other changes			Ending
Borrowings	W	10,006,685			(141,362	)		—		100,058			515		70,145			10,036,041
Lease liabilities		1,172,038			(208,342	)		173,095		—			50		(5,380	)		1,131,461
Derivative liabilities		33,555			—			—		(22,565	)		6,479		—			17,469
Derivative assets		(190,830	)		26,593			—		(71,435	)		28,601		(3,132	)		(210,203	)

Total	W	11,021,448			(323,111	)		173,095		6,058			35,645		61,633			10,974,768

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

27.

Segment Information

(1)

The management of the Group determines the operating segments based on the reported information when establishing the business strategy.


Details		Business service
ICT		Mobile/fixed line telecommunication service and convergence business, B2B business and others
Finance		Credit card business
Satellite TV		Satellite TV business
Real estate		Residential building development and supply
Others		IT, facility security, global business, and others

(2)

Details of each segment for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)
	2024
	Operating revenues						Operating profit						Depreciation and amortization¹
	Three-month			Six-month			Three-month			Six-month			Three-month			Six-month
ICT	W	4,548,296			9,243,124			358,858			752,631			803,949			1,609,251
Finance		907,046			1,780,963			42,225			74,923			8,445			16,939
Satellite TV		176,206			354,090			12,723			25,685			12,238			24,609
Real estate		153,478			286,637			23,410			39,550			17,159			35,339
Others		2,019,313			4,016,985			73,848			132,072			153,417			304,714

Subtotal		7,804,339			15,681,799			511,064			1,024,861			995,208			1,990,852
Elimination		(1,257,940	)		(2,480,826	)		(17,078	)		(24,375	)		(29,042	)		(51,001	)

Consolidated amount	W	6,546,399			13,200,973			493,986			1,000,486			966,166			1,939,851

¹	Sum of the amortization of property and equipment, intangible assets, investment properties and right-of-use assets

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)
	2023
	Operating revenues						Operating profit						Depreciation and amortization¹
	Three-month			Six-month			Three-month			Six-month			Three-month			Six-month
ICT	W	4,487,417			9,106,412			407,424			795,567			782,598			1,561,821
Finance		959,350			1,843,337			33,008			43,842			8,299			20,211
Satellite TV		181,008			359,687			18,831			35,135			13,480			27,188
Real estate		141,876			251,993			23,021			27,415			17,452			34,902
Others		1,995,074			3,828,946			105,929			166,042			140,621			275,424

Subtotal		7,764,725			15,390,375			588,213			1,068,001			962,450			1,919,546
Elimination		(1,217,204	)		(2,399,178	)		(12,105	)		(5,788	)		(33,260	)		(60,913	)

Consolidated amount	W	6,547,521			12,991,197			576,108			1,062,213			929,190			1,858,633

¹	Sum of the amortization of property and equipment, intangible assets, investment properties and right-of-use assets.

(3)

Operating revenues for the six-month periods ended June 30, 2024 and 2023, and non-current assets as of June 30, 2024 and December 31, 2023, by geographical regions, are as follows:


(In millions of Korean won)	2024
	Operating revenues				Non-current assets¹
	Three-month		Six-month		June 30, 2024
Domestic	W	6,500,587		13,113,006		20,162,187
Overseas		45,812		87,967		232,597

Total	W	6,546,399		13,200,973		20,394,784


(In millions of Korean won)	2023
	Operating revenues				Non-current assets¹
	Three months		Six months		December 31, 2023
Domestic	W	6,501,361		12,904,253		20,725,694
Overseas		46,160		86,944		183,344

Total	W	6,547,521		12,991,197		20,909,038

¹	Sum of property and equipment, intangible assets, investment properties and right-of-use assets.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

28.

Related Party Transactions

(1)

The list of related party of the Group as of June 30, 2024, is as follows:


Relationship		Name of Entity
Associates and joint ventures		53 entities such as K Bank Inc., KIF Investment Fund, Megazone Cloud Corporation, and KIAMCO Data Center Development Real Estate General Private Placement Investment Blind Trusts

Others ¹		Goody Studio Co., Ltd., Rebellion Inc., Digital Pharm Co., Ltd., Mastern No.127 Logispoint Daegu Co., KORAMKO No. 143 General Private Real Estate Investment Company

¹	Included within the scope of related parties under Korean IFRS 1024 due to the presence of significant influence, even though treated in accordance with Korean IFRS 1109.

(2)

Outstanding balances of receivables and payables in relations to transactions with related parties as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)		June 30, 2024
		Receivables						Payables
Relationship	Name of Entity	Trade receivables		Other receivables		Lease receivables		Trade payables		Other payables		Lease liabilities
Associates and joint ventures	K Bank, Inc.	W	826		196,930		628		—		335		—
	Little Big Pictures		235		4,796		—		—		4		—
	K-Realty 11th Real Estate Investment Trust Company		110		1,283		—		—		—		6,316
	K-Realty No.3 Real Estate General Private Placement Investment		3,112		—		—		—		—		—
	Others		2,530		894		—		21		6,650		—

	Total	W	6,813		203,903		628		21		6,989		6,316

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)		December 31, 2023
		Receivables						Payables
Relationship	Name of Entity	Trade receivables		Other receivables		Lease receivables		Trade payables		Other payables		Lease liabilities
Associates and joint ventures	K Bank, Inc.	W	862		326,006		769		—		299		—
	Little Big Pictures		232		3,473		—		9		6		—
	K-Realty 11th Real Estate Investment Trust Company		110		1,283		—		—		—		6,732
	K-Realty No.3 Real Estate General Private Placement Investment		4,576		—		—		—		—		—
	Others		2,044		162		—		2,900		3,029		—

	Total	W	7,824		330,924		769		2,909		3,334		6,732

(3)

Significant transactions with related parties for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)		2024
		Sales				Purchases				Acquisition of right-of-use assets
Relationship	Name of Entity	Operating revenue		Other income		Operating expenses		Others¹		Acquisition of right-of-use assets
Associates and joint ventures	K Bank, Inc.	W	16,574		—		9,453		—		—
	HD Hyundai Robotics Co., Ltd.		38		—		—		—		—
	K-Realty 11th Real Estate Investment Trust Company		18		100		1,385		—		19
	K-Realty No.3 Real Estate General Private Placement Investment Company		5,241		164		—		—		—
	Others		12,280		302		17,772		—		—
Others	Rebellions Co.,Ltd		17		—		—		430		—

	Total	W	34,168		566		28,610		430		19

¹	The amount of acquisition of property, equipment and others is included.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)		2023
		Sales				Purchases				Acquisition of right-of-use assets
Relationship	Name of Entity	Operating revenue		Other income		Operating expenses		Others¹		Acquisition of right-of-use assets
Associates and joint ventures	K Bank, Inc.	W	11,196		—		5,647		—		—
	Hyundai Robotics Co., Ltd.¹		40		—		182		—		—
	K-Realty 11th Real Estate Investment Trust Company		128		100		1,149		—		34
	Others²		8,085		413		20,061		137		—

	Total	W	19,449		513		27,039		137		34

¹	The amount of acquisition of property, equipment and others is included.

²	Transactions with KT Living, Inc. (formerly KD Living, Inc.) before it was classified as subsidiary of the Group are included.


(In millions of Korean won)		2024						2023
Relationship	Name of Entity	Finance income		Finance costs		Dividend Income		Finance income		Finance costs		Dividend income
Associates and joint ventures	K Bank, Inc.	W	4,403		—		—		3,853		—		—
	K-Realty 11th Real Estate Investment Trust Company		—		102		202		—		129		277
	Others¹		—		—		4,495		—		—		1,629

	Total	W	4,403		102		4,697		3,853		129		1,906

¹	Transactions with KT Living, Inc. (formerly KD Living, Inc.) before it was classified as subsidiary of the Group are included.

(4)

Key management compensation for the six-month periods ended June 30, 2024 and 2023, consists of:


(In millions of Korean won)	2024		2023
Salaries and other short-term benefits	W	824		619
Post-employment benefits		97		71
Share-based compensation		332		302

Total	W	1,253		992

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(5)

Fund transactions with related parties for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024
	Borrowing transactions¹				Equity contributions in cash
	Borrowings		Repayments		Equity contributions in cash
Associates and joint ventures
IBK-KT Young Entrepreneurs MARS Investment Fund	W	—		—		6,000
K-Realty 11th Real Estate Investment Trust Company		—		508		—
TeamFresh Corp.²		—		—		52,841
Others		—		—		19,835
Others
Rebellions Co.,Ltd.		—		—		9,999

Total	W	—		508		88,675


(In millions of Korean won)	2023
	Borrowing transactions¹				Equity contributions in cash
	Borrowings		Repayments		Equity contributions in cash
Associates and joint ventures
Megazone Cloud Corporation	W	30,000		—		—
K-Realty 11th Real Estate Investment Trust Company		—		494		—
STIC Place General Private Placement Real Estate Investment Trust No.2		—		—		20,000
Telco Credit Bureau Co.,Ltd.		—		—		6,500
Super Growth K-contents Fund		—				6,000
6,000Others ³		—		—		5,967

Total	W	30,000		494		38,467

¹	Lease transactions are included in borrowing transactions.

²	The transaction involved acquiring redeemable convertible preference shares of TeamFresh Corp. and occurred in the process of exchange with the shares of Lolab Co., Ltd. that were held.

³	Includes transactions before Studio Discovery Co., Ltd. was excluded from the associates.

(6)

Provision of collateral and investment agreement and others

The Group has an obligation according to invest agreements with related parties such as KIAMCO Data Center Development Real Estate General Private Placement Investment Blind Trusts. As of June 30, 2024 the Group has a plan to make an additional investment of W106,928 million.

(7)

As of June 30, 2024, the limit of the credit card contract provided by the Group to K Bank, Inc. is W1,344 million (December 31, 2023: W1,050 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

29.

Fair Value

(1)

Fair Value of Financial Instruments by Category

Carrying amount and fair value of financial instruments by category as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024				December 31, 2023
	Carrying amount		Fair value		Carrying amount		Fair value
Financial assets
Cash and cash equivalents	W	3,786,724		¹		2,879,554		¹
Trade and other receivables
Financial assets at amortized cost ²		8,006,889		¹		8,326,229		¹
Financial assets at fair value through other comprehensive income		112,860		112,860		116,198		116,198
Other financial assets
Financial assets at amortized cost		1,002,142		¹		1,385,921		¹
Financial assets at fair value through profit or loss		1,064,624		1,064,624		939,661		939,661
Financial assets at fair value through other comprehensive income		1,983,633		1,983,633		1,680,168		1,680,168
Derivative financial assets for hedging		324,845		324,845		159,211		159,211

Total	W	16,281,717				15,486,942

Financial liabilities
Trade and other payables	W	8,007,446		¹		8,317,822		¹
Borrowings		10,150,585		9,596,901		10,218,165		9,979,545
Other financial liabilities
Financial liabilities at amortized cost		906,785		¹		915,185		¹
Financial liabilities at fair value through profit or loss		113,329		113,329		136,106		136,106
Derivative financial liabilities for hedging		1,684		1,684		24,547		24,547

Total	W	19,179,829				19,611,825

Since the carrying amount represents a reasonable approximation of fair value, it has been excluded from the fair value disclosures.

Lease receivables are excluded from fair value disclosure in accordance with Korean IFRS 1107.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Fair Value Hierarchy

Assets measured at fair value or for which the fair value is disclosed are categorized within the fair value hierarchy, and the defined levels are as follows:

•

Level 1: The quoted (unadjusted) price in active markets for identical assets or liabilities that an entity can access at the measurement date.

•

Level 2: All inputs other than quoted prices included in Level 1 that are observable (either directly that is, or indirectly that is, derived from prices) for the asset or liability.

•

Level 3: The unobservable inputs for the asset or liability.

Fair value hierarchy classifications of the financial assets and financial liabilities that are measured disclosed at fair value or its fair value is disclosed as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024
	Level 1		Level 2		Level 3		Total
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	W	—		112,860		—		112,860
Other financial assets
Financial assets at fair value through profit or loss		8,042		196,813		859,769		1,064,624
Financial assets at fair value through other comprehensive income		1,533,170		5,331		445,132		1,983,633
Derivative financial assets for hedging		—		324,845		—		324,845

Total	W	1,541,212		639,849		1,304,901		3,485,962

Liabilities
Borrowings	W	—		9,596,901		—		9,596,901
Other financial liabilities
Financial liabilities at fair value through profit or loss		—		—		113,329		113,329
Derivative financial liabilities for hedging		—		1,684		—		1,684

Total	W	—		9,598,585		113,329		9,711,914

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	W	—		116,198		—		116,198
Other financial assets
Financial assets at fair value through profit or loss		13,911		156,918		768,832		939,661
Financial assets at fair value through other comprehensive income		1,230,936		5,206		444,026		1,680,168
Derivative financial assets for hedging		—		159,211		—		159,211

Total	W	1,244,847		437,533		1,212,858		2,895,238

Liabilities
Borrowings	W	—		9,979,545		—		9,979,545
Other financial liabilities
Financial liabilities at fair value through profit or loss		—		1,545		134,561		136,106
Derivative financial liabilities for hedging		—		24,547		—		24,547

Total	W	—		10,005,637		134,561		10,140,198

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(3)

Transfers Between Fair Value Hierarchy Levels of Recurring Fair Value Measurements

Details of transfers between Level 1 and Level 2 of the fair value hierarchy for recurring fair value measurements

There are no transfers between Level 1 and Level 2 of the fair value hierarchy for the recurring fair value measurements.

Details of changes in Level 3 of the fair value hierarchy for recurring fair value measurements.

Details of changes in Level 3 of the fair value hierarchy for the recurring fair value measurements are as follows:


(In millions of Korean won)	2024
	Financial assets						Financial liabilities
	Financial assets at FVTPL			Financial assets at FVOCI			Financial liabilities at FVTPL
Beginning balance	W	768,832			444,026			134,561
Acquisition		38,519			1,011			—
Transfer		50,995			(207	)		5,772
Disposal		(9,388	)		—			—
Amount recognized in profit or loss		10,811			—			(27,004	)
Amount recognized in other comprehensive income		—			302			—

Ending balance	W	859,769			445,132			113,329


(In millions of Korean won)	2023
	Financial assets									Financial liabilities
	Financial assets at FVTPL			Financial assets at FVOCI			Derivative financial assets (liabilities) for hedging			Financial liabilities at FVTPL
Beginning balance	W	612,069			497,129			1,113			141,280
Acquisition		38,358			—			—			—
Transfer		(2,453	)		(511	)		(1,113	)		—
Changes in consolidation scope		252			—			—			—
Disposal		(4,704	)		(6	)		—			—
Amount recognized in profit or loss		(18,943	)		—			—			22,004
Amount recognized in other comprehensive income		—			(233	)		—			—

Ending balance	W	624,579			496,379			—			163,284

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(4)

Valuation Technique

Valuation techniques used in the recurring, non-recurring fair value measurements and disclosed fair values categorized within Level 2 and Level 3 of the fair value hierarchy as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024
	Fair value		Level	Major valuation techniques
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	W	112,860	2	DCF Model
Other financial assets
Financial assets at fair value through profit or loss		1,056,582	2,3	DCF Model, Adjusted Net Asset Model, Monte-Carlo Simulation
Financial assets at fair value through other comprehensive income		450,463	2,3	DCF Model, Market Approach Model
Derivative financial assets for hedging		324,845	2	DCF Model
Liabilities
Borrowings		9,596,901	2	DCF Model
Other financial liabilities
Financial liabilities at fair value through profit or loss		113,329	3	Binomial Option Pricing Model
Derivative financial liabilities for hedging		1,684	2	DCF Model

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	December 31, 2023
	Fair value		Level	Major valuation techniques
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	W	116,198	2	DCF Model
Other financial assets
Financial assets at fair value through profit or loss		925,750	2,3	DCF Model, Adjusted Net Asset Model, Monte-Carlo Simulation
Financial assets at fair value through other comprehensive income		449,232	2,3	DCF Model, Market Approach Model
Derivative financial assets for hedging		159,211	2	DCF Model
Liabilities
Borrowings		9,979,545	2	DCF Model
Other financial liabilities
Financial liabilities at fair value through profit or loss		136,106	2,3	DCF Model, Binomial Option Pricing Model
Derivative financial liabilities for hedging		24,547	2	DCF Model

(5)

Valuation Processes for Fair Value Measurements Categorized Within Level 3

The Group engages external experts that perform the fair value measurements required for financial reporting purposes. External experts report directly to the chief financial officer (CFO), and discuss the valuation processes and results with the CFO in line with the Group’s closing dates.

30.

Events After the Reporting Period

(1)

The Group has decided on a quarterly dividend at the Board of Directors dated July 16, 2024, and the details are as follows.


Type		Details
Dividend per share		W500 (Total dividend: W122,913 million)
Dividend yield		1.4%
Dividend report date		June 30, 2024
Dividend pay date		July 30, 2024

(2)

KT Cloud Co., Ltd., a subsidiary of the Group, exercised its stock purchase right (exercise amount: W20,328 million) for the entire shares of its subsidiary, Open cloud lab Co., Ltd., on July 1, 2024.

KT CORPORATION

Separate Interim Financial Statements

June 30, 2024 and 2023, and December 31, 2023

ATTACHMENT: INDEPENDENT AUDITOR’S REVIEW REPORT

KT Corporation

Index

June 30, 2024 and 2023, and December 31, 2023


	Page(s)

Report on Review of Separate Interim Financial Statements		1 – 2

Separate Interim Financial Statements

Separate Interim Statement of Financial Position		3 – 4

Separate Interim Statement of Profit or Loss		5

Separate Interim Statement of Comprehensive Income		6

Separate Interim Statement of Changes in Equity		7

Separate Interim Statement of Cash Flows		8

Notes to the Separate Interim Financial Statements		9 – 60

Deloitte Anjin LLC

9F., One IFC,

10, Gukjegeumyung-ro,

Youngdeungpo-gu, Seoul

07326, Korea

Tel: +82 (2) 6676 1000

Fax: +82 (2) 6674 2114

www.deloitteanjin.co.kr

Independent Auditor’s Review Report

[English Translation of Independent Auditor’s Review Report Originally Issued in Korean on August 14, 2024]

To the Shareholders and the Board of Directors of KT Corporation.

Reviewed Separate Interim Financial Statements

We have reviewed the accompanying Separate Interim financial statements of KT Corporation (the “Company”). The Separate Interim financial statements consist of the Separate Interim statement of financial position as of June 30, 2024, and the related Separate Interim statements of profit or loss and comprehensive income for the three-month and six-month periods ended June 30, 2024 and 2023, and changes in equity and cash flows for the six-month periods ended June 30, 2024 and 2023, all expressed in Korean won, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Separate Interim Financial Statements

Management is responsible for the preparation and fair presentation of these Separate Interim financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) No. 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of Separate Interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on these Separate Interim financial statements based on our reviews.

We conducted our reviews in accordance with the Review Standards for Quarterly and Semi-annual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. A review of Separate Interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing(“KSA”) and consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

LOGO

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying Separate Interim financial statements referred to above are not presented fairly, in all material respects, the financial position as of June 30, 2024, and its financial performance and its cash flows for the six-month period ended June 2024 in accordance with K-IFRS No.1034 Interim Financial Reporting.

Other Matters

We have audited the separate statement of financial position of the Company as of December 31, 2023, and the related separate statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, in accordance with KSA. We expressed an unqualified opinion on those financial statements in our audit report dated March 18, 2024. The accompanying separate statement of financial position as of December 31, 2023, presented for comparative purposes, is not different from the audited separate statement of financial position above in all material respects.

LOGO

Seoul, Korea

August 14, 2024

Notice to Readers

KT Corporation

Separate Interim Statements of Financial Position

As of June 30, 2024 and December 31, 2023


(In millions of Korean won)	Notes		June 30, 2024		December 31, 2023
Assets
Current Assets
Cash and cash equivalents		4,28	W	1,722,516	W	1,242,005
Trade and other receivables, net		4,5,28		3,097,575		3,190,269
Other financial assets		4,6,28		161,993		279,451
Inventories, net		7		404,135		368,117
Other current assets		8		2,065,500		2,008,723

Total Current Assets				7,451,719		7,088,565

Non-Current Assets
Trade and other receivables, net		4,5,28		321,137		370,717
Other financial assets		4,6,28		2,484,865		2,134,324
Property and equipment, net		9		11,264,367		11,492,776
Right-of-use assets		16		954,685		976,625
Investment properties, net		9		1,173,486		1,191,592
Intangible assets, net		9		1,271,263		1,487,848
Investments in subsidiaries, associates and joint ventures		10		4,829,865		4,796,606
Net defined benefit assets		14		28,470		60,590
Other non-current assets		8		684,958		709,276

Total Non-Current Assets				23,013,096		23,220,354

Total Assets			W	30,464,815	W	30,308,919

KT Corporation

Separate Interim Statements of Financial Position

As of June 30, 2024 and December 31, 2023


(In millions of Korean won)	Notes		June 30, 2024			December 31, 2023
Liabilities
Current Liabilities
Trade and other payables		4,11,28	W	4,452,135		W	4,232,377
Borrowings		4,12,28		1,789,530			1,725,234
Other financial liabilities		4,6,28		895			660
Current income tax liabilities				245,133			148,136
Provisions		13,15		85,182			91,861
Deferred income		19		48,731			39,618
Other current liabilities		4,8,16		693,474			719,605

Total Current Liabilities				7,315,080			6,957,491

Non-Current Liabilities
Trade and other payables		4,11,28		480,027			739,766
Borrowings		4,12,28		5,675,739			5,834,699
Other financial liabilities		4,6,28		1,403			23,819
Provisions		13		94,770			90,493
Deferred income		19		139,195			145,334
Deferred income tax liabilities				838,295			796,087
Other non-current liabilities		4,8,16		622,200			677,691

Total Non-Current Liabilities				7,851,629			8,307,889

Total Liabilities				15,166,709			15,265,380

Equity
Share capital				1,564,499			1,564,499
Share premium				1,440,258			1,440,258
Retained earnings		17		12,404,161			12,544,425
Accumulated other comprehensive income				281,100			64,229
Other components of equity		18		(391,912	)		(569,872	)

Total Equity				15,298,106			15,043,539

Total Liabilities and Equity			W	30,464,815		W	30,308,919

The above separate interim statements of financial position should be read in conjunction with the accompanying notes.

KT Corporation

Separate Interim Statements of Profit or Loss

For the three-month and six-month periods ended June 30, 2024 and 2023


			Three-Month and Six-Month Periods Ended June 30
(In millions of Korean won, except per share amounts)	Notes		2024				2023
			Three-month		Six-month		Three-month		Six-month
Operating Revenue		19	W	4,548,296	W	9,243,124	W	4,487,418	W	9,106,412
Operating Expenses		20		4,189,438		8,490,493		4,079,994		8,310,845

Operating Profit				358,858		752,631		407,424		795,567
Other income		21		86,257		186,124		55,079		171,599
Other expenses		21		37,920		86,191		63,349		112,011
Finance income		22		173,696		382,801		109,563		258,098
Finance costs		22		171,777		360,102		114,066		290,909

Profit before Income Tax				409,114		875,263		394,651		822,344
Income tax expense		23		94,614		206,732		89,596		197,424

Profit for the Period			W	314,500	W	668,531	W	305,055	W	624,920

Earnings per share
Basic earnings per share		24	W	1,280	W	2,718	W	1,222	W	2,474
Diluted earnings per share		24		1,280		2,717		1,222		2,473

The above separate interim statements of profit or loss should be read in conjunction with the accompanying notes.

KT Corporation

Separate Interim Statements of Comprehensive Income

For the three-month and six-month periods ended June 30, 2024 and 2023


			Three-Month and Six-Month Periods Ended June 30
(In millions of Korean won)	Notes		2024						2023
			Three-month			Six-month			Three-month			Six-month
Profit for the period			W	314,500		W	668,531		W	305,055		W	624,920

Other comprehensive income (loss)
Items that will not be reclassified to profit or loss:
Remeasurements of the net defined benefit liability		14		(582	)		1,571			641			2,717
Valuation gains on equity instruments at fair value through other comprehensive income				115,272			227,409			40,764			111,735
Items that are or may be subsequently reclassified to profit or loss:
Valuation gains (losses) on cash flow hedges		6		57,638			137,472			(10,419	)		46,169
Other comprehensive income from cash flow hedges reclassified to profit or loss				(62,295	)		(146,591	)		(8,850	)		(73,746	)

Other comprehensive income (loss) for the period, net of tax				110,033			219,861			22,136			86,875

Total comprehensive income (loss) for the period			W	424,533		W	888,392		W	327,191		W	711,795

The above separate interim statements of comprehensive income should be read in conjunction with the accompanying notes.

KT Corporation

Separate Interim Statements of Changes in Equity

For the six-month periods ended June 30, 2024 and 2023


(In millions of Korean won)	Notes		Share capital		Share premium		Retained earnings			Accumulated other comprehensive income			Other components of equity			Total equity
Balance as of January 1, 2023			W	1,564,499	W	1,440,258	W	12,347,403		W	(72,672	)	W	(421,408	)	W	14,858,080
Comprehensive income
Profit for the period				—		—		624,920			—			—			624,920
Gain on valuation of financial assets at fair value through other comprehensive income				—		—		222			111,513			—			111,735
Remeasurements of net defined benefit liabilities		14		—		—		2,717			—			—			2,717
Valuation gains (losses) on cash flow hedges		6		—		—		—			(27,577	)		—			(27,577	)

Total comprehensive income for the period				—		—		627,859			83,936			—			711,795

Transactions with owners
Dividends paid				—		—		(501,843	)		—			—			(501,843	)
Appropriation of retained earnings related to loss on disposal of treasury stock				—		—		(44,422	)		—			44,422			—
Acquisition of treasury stock				—		—		—			—			(300,086	)		(300,086	)
Others				—		—		—			—			6,704			6,704

Subtotal				—		—		(546,265	)		—			(248,960	)		(795,225	)

Balance as of June 30, 2023			W	1,564,499	W	1,440,258	W	12,428,997		W	11,264		W	(670,368	)	W	14,774,650

Balance as of January 1, 2024			W	1,564,499	W	1,440,258	W	12,544,425		W	64,229		W	(569,872	)	W	15,043,539
Comprehensive income
Profit for the period				—		—		668,531			—			—			668,531
Gain on valuation of financial assets at fair value through other comprehensive income		6		—		—		1,419			225,990			—			227,409
Remeasurements of net defined benefit liabilities		14		—		—		1,571			—			—			1,571
Valuation gains (losses) on cash flow hedges		6		—		—		—			(9,119	)		—			(9,119	)

Total comprehensive income for the period				—		—		671,521			216,871			—			888,392

Transactions with owners
Dividends paid				—		—		(482,970	)		—			—			(482,970	)
Interim Dividends paid				—		—		(122,859	)		—			—			(122,859	)
Acquisition of treasury stock				—				—			—			(27,100	)		(27,100	)
Disposal of treasury stock				—		—		—			—			3,760			3,760
Retirement of treasury stock								(205,956	)					205,956			—
Others				—		—		—			—			(4,656	)		(4,656	)

Subtotal				—		—		(811,785	)		—			177,960			(633,825	)

Balance as of June 30, 2024			W	1,564,499	W	1,440,258	W	12,404,161		W	281,100		W	(391,912	)	W	15,298,106

The above separate interim statements of changes in equity should be read in conjunction with the accompanying notes.

KT Corporation

Separate Interim Statements of Cash Flows

For the six-month periods ended June 30, 2024 and 2023


			Six-Month Periods Ended June 30
(In millions of Korean won)	Notes		2024			2023
Cash flows from operating activities
Cash generated from operations		25	W	2,641,158		W	2,524,688
Interest paid				(138,434	)		(136,173	)
Interest received				101,584			94,543
Dividends received				78,794			91,780
Income tax paid				(130,035	)		(121,150	)

Net cash inflow from operating activities				2,553,067			2,453,688

Cash flows from investing activities
Collection of loans				18,964			18,880
Disposals of financial assets at amortized cost				297,569			312,956
Disposals of financial assets at fair value through profit or loss				7,445			2,064
Disposals of financial assets at fair value through other comprehensive income				7,851			306
Disposals of investments in subsidiaries, associates and joint ventures				14,899			10,316
Disposals of property and equipment				24,424			13,979
Disposals of intangible assets				2,116			1,235
Disposals of right-of-use assets				100			333
Loans granted				(12,319	)		(14,775	)
Acquisitions of current financial assets at amortized cost				—			(300,000	)
Acquisitions of financial assets at fair value through profit or loss				(10,615	)		(2,195	)
Acquisitions of investments in subsidiaries, associates and joint ventures				(73,270	)		(25,525	)
Acquisitions of property and equipment				(968,580	)		(1,301,592	)
Acquisitions of intangible assets				(276,775	)		(308,939	)
Acquisitions of right-of-use assets				(444	)		(489	)

Net cash outflow from investing activities				(968,635	)		(1,593,446	)

Cash flows from financing activities
Proceeds from borrowings				698,700			1,808,990
Settlement of derivative instruments (inflow)				—			24,935
Dividends paid				(605,829	)		(501,843	)
Repayments of borrowings				(1,000,247	)		(2,072,333	)
Acquisition of treasury stock				(27,100	)		(300,086	)
Decrease in lease liabilities				(169,455	)		(160,719	)

Net cash outflow from financing activities		26		(1,103,931	)		(1,201,056	)

Effect of exchange rate change on cash and cash equivalents				10			183

Net increase (decrease) in cash and cash equivalents				480,511			(340,631	)
Cash and cash equivalents
Beginning of the period				1,242,005			966,307

End of the period			W	1,722,516		W	625,676

The above separate interim statements of cash flows should be read in conjunction with the accompanying notes.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

1.	General Information

KT Corporation (the “Company”) commenced operations on January 1, 1982, when it spun off from the Korea Communications Commission (formerly the Korean Ministry of Information and Communications) to provide telecommunication services and to engage in the development of advanced communications services under the Act of Telecommunications of Korea. The address of the Company’s registered office is 90, Buljeonga-ro, Bundang-gu, Seongnam City, Gyeonggi Province, Korea.

On October 1, 1997, upon the announcement of the Act on the Management of Government-Invested Institutions and the Privatization Law, the Company became a government-funded institution under the Commercial Code of Korea.

On December 23, 1998, the Company’s shares were listed on the Korea Exchange.

On May 29, 1999, the Company issued 24,282,195 additional shares and issued American Depository Shares (ADS), which represents new shares and 20,813,311 government-owned shares, on the New York Stock Exchange. On July 2, 2001, additional ADS, representing 55,502,161 government-owned shares, were issued on the New York Stock Exchange.

In 2002, the Company acquired the entire government-owned shares in accordance with the Korean government’s privatization plan. As of June 30, 2024, the Korean government does not own any shares in the Company.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

2.	Material Accounting Policies

2.1

Basis of Preparation

The Company maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (“Korean IFRS” or “K-IFRS”). The accompanying separate interim financial statements have been condensed, restructured, and translated into English from the Korean language financial statements.

The Separate Interim financial statements of the Company for the six-month period ended June 30, 2024, have been prepared in accordance with Korean IFRS 1034 Interim Financial Reporting and are separate financial statements in accordance with IFRS 1027. In order to understand the interim financial statements, the annual financial statements as of December 31, 2023 prepared in accordance with IFRS should be used together.

2.2

Changes in Accounting Policies and Disclosures

(1)

New and amended standards and interpretations adopted by the Company :

The Company has applied a number of new and amended standards and new interpretations issued that are effective for accounting periods beginning on January 1, 2024.

•

K-IFRS 1001 Presentation of Financial Statements (Amendment in 2020) – Classification of Liabilities as Current or Non-current

•

K-IFRS 1001 Presentation of Financial Statements (Amendment in 2023) – Non-current Liabilities with Covenants

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

The amendments also specify that the right to defer settlement of a liability for at least twelve months after the reporting date is not affected if an entity must only comply with a covenant after the reporting period. However, if the entity’s right to defer settlement of a liability is subject to the entity’s compliance with covenants within twelve months after the reporting period, an entity discloses information that enables users of financial statements to understand the risk of the liabilities becoming repayable within twelve months after the reporting period. This would include information about the covenants (including the nature of the covenants and when the entity is required to comply with them), the carrying amount of related liabilities, and facts and circumstances, if any, that indicate that the entity may have difficulties complying with the covenants.

•

K-IFRS 1007 Cash Flow Statement and K-IFRS 1107 Financial Instruments Disclosure (Amendment) - Supplier Finance Agreements

The amendments add a disclosure objective in K-IFRS 1007 Cash Flow Statement stating that an entity is required to disclose information about supplier finance agreements that enables users of financial statements to assess the effects of those arrangements on the Company’s liabilities and cash flows. In addition, K-IFRS 1107 is amended to add supplier finance arrangements as an example within the requirements to disclose information about an entity’s exposure to concentration of liquidity risk.

The term ‘supplier finance agreements’ is not defined; instead, the amendments describe the characteristics of an arrangement for which an entity would be required to provide the information.

To meet the disclosure objective, an entity will be required to disclose in aggregate for its supplier finance arrangements:

•

The terms and conditions of an agreement

•

The carrying amount, and associated line items presented in the entity’s statement of financial position, of the liabilities that are part of the arrangements

•

The carrying amount, and associated line items for which the suppliers have already received payment from the finance providers

•

Ranges of payment due dates for both those financial liabilities that are part of a supplier finance arrangement and comparable trade payables that are not part of a supplier finance arrangement

•

Types of non-cash changes in the carrying amount of financial liabilities corresponding to supplier finance agreements and their impact

•

Liquidity risk information

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

•

K-IFRS 1116 Leases (Amendment) - Lease Liability in a Sale and Leaseback

•

K-IFRS 1001 Presentation of Financial Statements (Amendment in 2023) - Disclosure of Virtual Assets

(2)

New and revised standards and interpretations in issue but not yet effective or adopted by the Company

At the date of authorization of these financial statements, the Company has not applied the following new and amended K-IFRS standards that have been issued but are not yet effective:

•

K-IFRS 1021 The effects of changes in foreign exchange rates and K-IFRS 1101 First time adoption of international financial reporting- Improving Interchangeability

The amendments define situations in which exchange with other currencies is possible for accounting purposes and clarify the assessment of exchangeability with other currencies, the estimation, and requirements for disclosure of spot exchange rates to be used in the absence of exchangeability.

The above amendments are applicable for annual reporting periods beginning on or after 1 January 2025, with early application permitted.

The Company is reviewing the impact of the above-listed amendments on the financial statements.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

2.3

Accounting Policies

Material accounting policies and method of computation used in the presentation of the separate interim financial statements are consistent with those of the separate financial statements for the year ended December 31, 2023, except for the changes due to the application of amendment and enactments of standards described in Note 2.2 (1) and as described below.

2.3.1

Income Tax Expense

Income tax expense for the interim period is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual effective income tax rate is applied to the pre-tax income of the interim period.

3.	Critical Accounting Estimates and Assumptions

The preparation of financial statements requires the Company to make estimates and assumptions concerning the future. Management also needs to exercise judgement in applying the Company’s accounting policies. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. As the resulting accounting estimates will, by definition, seldom equal the actual results, they pose significant risk of resulting in a material adjustment.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

4.	Financial Instruments by Category

Financial instruments by category as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024
Financial assets	Financial assets at amortized cost		Financial assets at FVTPL		Financial assets at FVOCI		Derivatives used for hedging		Total
Cash and cash equivalents	W	1,722,516		—		—		—		1,722,516
Trade and other receivables		3,305,853		—		112,859		—		3,418,712
Other financial assets		80,465		510,156		1,736,334		319,903		2,646,858


(In millions of Korean won)	June 30, 2024
Financial liabilities	Financial liabilities at amortized cost		Financial liabilities at FVTPL		Derivatives used for hedging		Others		Total
Trade and other payables¹	W	4,537,184		—		—		—		4,537,184
Borrowings		7,465,269		—		—		—		7,465,269
Other financial liabilities		—		1,403		895		—		2,298
Lease liabilities		—		—		—		826,383		826,383

¹	Amounts related to employee benefit plans are excluded in Trade and other payables.


(In millions of Korean won)	December 31, 2023
Financial assets	Financial assets at amortized cost		Financial assets at FVTPL		Financial assets at FVOCI		Derivatives used for hedging		Total
Cash and cash equivalents	W	1,242,005		—		—		—		1,242,005
Trade and other receivables		3,444,788		—		116,198		—		3,560,986
Other financial assets		377,996		441,321		1,437,684		156,774		2,413,775


(In millions of Korean won)	December 31, 2023
Financial liabilities	Financial liabilities at amortized cost		Financial liabilities at FVTPL		Derivatives used for hedging		Others		Total
Trade and other payables¹	W	4,659,037		—		—		—		4,659,037
Borrowings		7,559,933		—		—		—		7,559,933
Other financial liabilities		—		1,403		23,076		—		24,479
Lease liabilities		—		—		—		851,610		851,610

¹	Amounts related to employee benefit plans are excluded in Trade and other payables.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

5.	Trade and Other Receivables

(1)

Trade and other receivables as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024
	Total amounts		Provision for impairment			Present value discount			Carrying amount
Current assets
Trade receivables	W	3,019,217		(284,019	)		(8,572	)		2,726,626
Other receivables		408,479		(35,378	)		(2,152	)		370,949

Total	W	3,427,696		(319,397	)		(10,724	)		3,097,575

Non-current assets
Trade receivables	W	222,679		(927	)		(15,315	)		206,437
Other receivables		122,412		(431	)		(7,281	)		114,700

Total	W	345,091		(1,358	)		(22,596	)		321,137


(In millions of Korean won)	December 31, 2023
	Total amounts		Provision for impairment			Present value discount			Carrying amount
Current assets
Trade receivables	W	3,062,159		(278,716	)		(8,778	)		2,774,665
Other receivables		447,335		(29,616	)		(2,115	)		415,604

Total	W	3,509,494		(308,332	)		(10,893	)		3,190,269

Non-current assets
Trade receivables	W	275,354		(927	)		(18,314	)		256,113
Other receivables		121,958		(431	)		(6,923	)		114,604

Total	W	397,312		(1,358	)		(25,237	)		370,717

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Details of other receivables as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Loans	W	33,289			40,069
Receivables		258,765			261,692
Accrued income		7,545			5,275
Refundable deposits		221,859			253,219
Provision for impairment		(35,809	)		(30,047	)

Total		485,649			530,208

(3)

The maximum exposure to credit risks for trade and other receivables is the carrying amount of each class of receivables mentioned above as of June 30, 2024.

(4)

The Company classifies a certain portion of the trade receivables as financial assets at FVOCI, based on business model for managing the asset and the cash flow characteristics of the contract.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

6.	Other Financial Assets and Liabilities

(1)

Details of other financial assets and liabilities as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Other financial assets
Financial assets at amortized cost ¹	W	80,465			377,996
Financial assets at FVTPL ²		510,156			441,321
Financial assets at FVOCI		1,736,334			1,437,684
Derivatives used for hedging		319,903			156,774
Less: Non-current		(2,484,865	)		(2,134,324	)

Current	W	161,993			279,451

Other financial liabilities
Financial liabilities at fair value through profit or loss	W	1,403			1,403
Derivatives used for hedging		895			23,076
Less: Non-current		(1,403	)		(23,819	)

Current	W	895			660

¹	As of June 30, 2024, the Company’s financial instruments amount to W30,464 million (December 31, 2023: W30,464 million) and consist of checking account deposits, time deposits, and others which are subject to withdrawal restrictions.

²	As of June 30, 2024, the Company provided investment in Korea Software Financial Cooperative and others amounting to W1,136 million as collateral in exchange for the payment guarantee provided by the Korea Software Financial Cooperative and others.

(2)

Financial Assets at fair value through profit or loss

Details of financial assets at fair value through profit or loss as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Debt instruments	W	509,092			440,257
Derivative liabilities held for trading ¹		1,064			1,064
Less: Non-current		(510,156	)		(441,321	)

Current	W	—			—

Derivative assets amounting to W1,015 million, which is recognized by an agreement with LS Cable & System Ltd. in connection with LS Marine Solution Co., Ltd. and a call option amounting to W49 million in connection with the acquisition of Epsilon Global Communications Pte. Ltd. are included (Note 15).

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

The maximum exposure to credit risks debt instruments of financial assets at fair value through profit or loss is the carrying amount of each class of debt instruments above as of June 30, 2024.

(3)

Financial Assets at fair value through other comprehensive income

Details of financial assets at fair value through other comprehensive income as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Equity instruments (Listed)	W	1,535,145			1,236,495
Equity instruments (Unlisted)		201,189			201,189
Less: Non-current		(1,736,334	)		(1,437,684	)

Current	W	—			—

Upon disposal of these equity instruments, any balance within the other comprehensive income is reclassified not to profit or loss, but to retained earnings. Upon disposal of these debt instruments, the remaining balance of the accumulated other comprehensive income is reclassified to profit or loss.

(4)

Derivatives used for hedging

Details of valuation of derivatives used for hedging as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024					December 31, 2023
	Assets			Liabilities		Assets			Liabilities
Currency swap ¹	W	319,903			895		156,774			23,076
Less: Non-current		(238,371	)		—		(105,680	)		(22,416	)

Current	W	81,532			895		51,094			660

¹	The currency swap contract is to hedge the risk of volatility in cash flow from the borrowings due to changes in interest rate and foreign exchange rate and the expected maximum period for the Company to be exposed to risks of cash flow volatility by hedged items is until September 7, 2034.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

Details of valuation gains and losses from derivatives for risk hedging purposes for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)
	2024							2023
Type of transaction	Valuation gain		Valuation loss		Other comprehensive loss¹			Valuation gain		Valuation loss		Other comprehensive loss¹
Currency swap	W	197,811		193		(12,307	)		94,896		185		(36,858	)

¹	The amounts directly reflected in equity are before adjustments of deferred income tax.

The ineffective portion recognized in profit or loss related to cash flow hedges is valuation gains of W1,205 million for the year ended June 30, 2024 (June 30, 2023: valuation gains of W711 million).

(5)

Financial Liabilities at fair value through profit or loss

Details of financial liabilities at fair value through profit or loss as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Derivative liabilities held for trading ¹	W	1,403		1,403

¹	Derivative liabilities recognized in relation to acquisition of Epsilon Global Communications Pte. Ltd. (Note 15).

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

7.	Inventories

Inventories as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)
	June 30, 2024							December 31, 2023
	Acquisition cost		Valuation allowance			Carrying amount		Acquisition cost		Valuation allowance			Carrying amount
Merchandise	W	458,823		(54,688	)		404,135		448,307		(80,190	)		368,117

Cost of inventories recognized as expenses for the six-month periods ended June 30, 2024 amounts to W1,194,359 million (For the six-month period ended June 30, 2023: W1,207,991 million), and reversal of inventory valuation loss amounts to W25,502 million for the six-month periods ended June 30, 2024 (For the six-month periods ended June 30, 2023: reversal of valuation loss on inventory of W7,353 million).

8.	Other Assets and Liabilities

Other assets and liabilities as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Other assets
Advance payments	W	54,679			60,065
Prepaid expenses		153,953			79,051
Contract costs		1,766,307			1,804,448
Contract assets		775,519			774,435
Less: Non-current		(684,958	)		(709,276	)

Current	W	2,065,500			2,008,723

Other liabilities
Advances received ¹	W	232,584			245,797
Withholdings		19,445			39,214
Unearned revenue		4,008			951
Lease liabilities		826,383			851,610
Contract liabilities		233,254			259,724
Less: Non-current		(622,200	)		(677,691	)

Current	W	693,474			719,605

¹	The amounts include adjustments arising from adoption of Korean IFRS 1115 Revenue from Contracts with Customers (Note 19).

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

9.	Property and Equipment, Investment Properties, and Intangible Assets

(1)

Changes in property and equipment for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning, net	W	11,492,776			11,540,162
Acquisition and capital expenditure		1,038,655			1,071,669
Disposal and termination		(34,702	)		(31,538	)
Depreciation		(1,200,285	)		(1,153,835	)
Transfer to investment properties		(5,651	)		(85,493	)
Others		(26,426	)		(64,711	)

Ending, net	W	11,264,367			11,276,254

(2)

Changes in investment properties for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning, net	W	1,191,592			1,137,489
Depreciation		(23,757	)		(23,496	)
Transfer to property and equipment		5,651			85,493

Ending, net	W	1,173,486			1,199,486

(3)

As of June 30, 2024, the Company (Lessor) has entered into a non-cancellable operating lease contract for real estate. The future minimum lease payments under this contract amount to W132,356 million for one year or less, W249,802 million for more than one year and less than five years, W485,117 million for over five years, and W867,275 million in total.

(4)

Details of investment properties provided as collateral as of June 30, 2024 and December 31, 2023, are as follows:

(In millions of Korean won)

June 30, 2024

Collateral

Carrying
amount

Secured
amount

Related
account

Related
amount

Secured
party

Land and buildings

162,933

35,364

Deposits

29,677

Lessee

(In millions of Korean won)

December 31, 2023

Collateral

Carrying
amount

Secured
amount

Related
account

Related
amount

Secured
party

Land and buildings

165,732

34,952

Deposits

29,211

Lessee

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(5)

Changes in intangible assets for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning, net	W	1,487,848			1,855,679
Acquisition and capital expenditure ¹		31,737			70,641
Disposal and termination		(9,134	)		(4,230	)
Amortization		(239,188	)		(239,942	)

Ending, net	W	1,271,263			1,682,148

¹	Amounts include transfers from property and equipment.

The carrying amount of goodwill and memberships assessed to have indefinite useful life and, therefore, not subject to amortization is W65,057 million (December 31, 2023: W65,057 million) and W55,906 million (December 31, 2023: W54,717 million), respectively as of June 30, 2024.

10.

Investments in Subsidiaries, Associates and Joint Ventures

(1)

Carrying amounts in investments in subsidiaries, associates and joint ventures as of June 30, 2024 and December 31, 2023, is as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Subsidiaries	W	4,411,654		4,381,161
Associates and joint ventures		418,211		415,445

Total	W	4,829,865		4,796,606

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

Investments in subsidiaries as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)						Carrying amount
	Location		Percentage of ownership (%)			June 30, 2024		December 31, 2023
KT Estate Inc.		Korea		100.0	%	W	1,084,522		1,084,522
KT Sat Co., Ltd.		Korea		100.0	%		390,530		390,530
KTCS Corporation ¹		Korea		8.4	%		6,427		6,427
KTIS Corporation ¹		Korea		33.3	%		30,633		30,633
KT Skylife Co., Ltd.		Korea		50.6	%		311,696		311,696
BC Card Co., Ltd.		Korea		69.5	%		633,004		633,004
KT M&S Co., Ltd.		Korea		100.0	%		26,764		26,764
KT Alpha Co., Ltd.		Korea		70.5	%		130,924		130,924
KT Telecop Co., Ltd.		Korea		86.8	%		134,308		134,308
Nasmedia, Inc.¹		Korea		44.1	%		23,051		23,051
KTDS Co., Ltd.		Korea		91.6	%		19,616		19,616
KTGDH Co., Ltd.		Korea		100.0	%		2,745		2,745
KT Sports Co., Ltd.		Korea		52.6	%		27,327		27,327
KT M Mobile Co., Ltd.		Korea		100.0	%		102,237		102,237
KT Service Bukbu Co., Ltd.		Korea		67.3	%		3,873		3,873
KT Service Nambu Co., Ltd.		Korea		76.4	%		10,160		10,160
KT Strategic Investment Fund No.3		Korea		86.7	%		130		2,947
PlayD Co., Ltd. ²		Korea		23.5	%		20,000		20,000
KT MOS Bukbu Co., Ltd.		Korea		100.0	%		6,334		6,334
KT MOS Nambu Co., Ltd.		Korea		98.4	%		4,267		4,267
Next Connect PFV		Korea		100.0	%		24,250		24,250
KT Strategic Investment Fund No.5		Korea		95.0	%		19,000		19,000
KT Engineering Co., Ltd.		Korea		59.8	%		28,000		28,000
KT Studio Genie Co., Ltd.		Korea		90.9	%		283,620		283,620
Lolab Co., Ltd. ³		Korea		—			—		21,958
KT ES Pte. Ltd.		Singapore		68.8	%		81,910		13,640
Altimedia Corporation		Korea		100.0	%		22,000		22,000
Kt Cloud Co., Ltd.		Korea		92.7	%		901,504		901,504
Others							82,822		95,824

Total						W	4,411,654		4,381,161

As of June 30, 2024, although sum of percentage of ownership of the Company and its subsidiaries is less than 50% ownership in these entities, these entities are included in investments in subsidiaries due to the dispersion of other shareholders excluding the Company and voting patterns at previous shareholders’ meetings.

²	As of June 30, 2024, this entity is included in investments in subsidiaries, as Nasmedia Co., Ltd. holds 46.9% ownership, while the Company and its subsidiary together hold 70.4% ownership.

³	As of June 30, 2024, this entity is excluded from subsidiaries due to loss of control.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

Investments in associates and joint ventures as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	Location		Percentage of ownership (%)			Carrying amount
(In millions of Korean won)	Location		Percentage of ownership (%)			June 30, 2024		December 31, 2023
KIF Investment Fund		Korea		33.3	%	W	115,636		115,636
HD Hyundai Robotics Co., Ltd. ¹		Korea		10.0	%		50,000		50,000
Megazone Cloud Corporation ¹		Korea		6.7	%		130,001		130,001
KT-DSC Creative Economy YouthStart-up Investment Fund ¹		Korea		17.1	%		2,055		2,220
LS Marine Solution Co., Ltd.¹		Korea		6.6	%		5,409		5,409
Others							115,110		112,179

Total							418,211		415,445

¹	The Company holds less than 20% interest in the investees as of June 30, 2024, but the investments are classified as investments in associates as the Company exerts significant influence over the operational and financial policies.

(2)

Changes in investments in subsidiaries, associates and joint ventures for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning	W	4,796,606			4,879,219
Acquisition		73,270			25,516
Disposal		(40,011	)		(10,311	)
Others ¹		—			(771	)

Ending	W	4,829,865			4,893,653

¹	As of June 30, 2024, the Company exchanged subsidiary corporate investment shares in Lolab Co., Ltd. for redeemable convertible preferred shares of TeamFresh Corp.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

11.

Trade and Other Payables

(1)

Details of trade and other payables as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Current liabilities
Trade payables	W	931,864		713,833
Other payables		3,520,271		3,518,544

Total	W	4,452,135		4,232,377

Non-current liabilities
Other payables	W	480,027		739,766

(2)

Details of other payables as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Non-trade payable	W	2,334,601			2,880,385
Accrued expenses		1,188,899			879,613
Operating deposits		379,364			401,271
Others		97,434			97,041
Less: Non-current		(480,027	)		(739,766	)

Current	W	3,520,271			3,518,544

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

12.

Borrowings

(1)

Details of borrowings as of June 30, 2024 and December 31, 2023, are as follows:

Debentures


(In millions of Korean won and foreign currencies in thousands)			June 30, 2024				December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won
MTNP notes ¹	Sep. 7, 2034	6.500%		USD 100,000	W	138,920		USD 100,000	W	128,940
MTNP notes	Jul. 18, 2026	2.500%		USD 400,000		555,680		USD 400,000		515,760
MTNP notes	Jul. 19, 2024	0.330%		JPY 400,000		3,457		JPY 400,000		3,651
MTNP notes	Sep. 1, 2025	1.000%		USD 400,000		555,680		USD 400,000		515,760
FR notes ²	Nov. 1, 2024	Compounded SOFR +1.210%		USD 350,000		486,220		USD 350,000		451,290
MTNP notes	Jan. 21, 2027	1.375%		USD 300,000		416,760		USD 300,000		386,820
MTNP notes	Aug. 8, 2025	4.000%		USD 500,000		694,600		USD 500,000		644,700
The 183-3rd Public bond	Dec. 22, 2031	4.270%		—		160,000		—		160,000
The 184-3rd Public bond	Apr. 10, 2033	3.170%		—		100,000		—		100,000
The 186-3rd Public bond	Jun. 26, 2024	—		—		—		—		110,000
The 186-4th Public bond	Jun. 26, 2034	3.695%		—		100,000		—		100,000
The 187-3rd Public bond	Sep. 2, 2024	3.314%		—		170,000		—		170,000
The 187-4th Public bond	Sep. 2, 2034	3.546%		—		100,000		—		100,000
The 188-2nd Public bond	Jan. 29, 2025	2.454%		—		240,000		—		240,000
The 188-3rd Public bond	Jan. 29, 2035	2.706%		—		50,000		—		50,000
The 189-3rd Public bond	Jan. 28, 2026	2.203%		—		100,000		—		100,000
The 189-4th Public bond	Jan. 28, 2036	2.351%		—		70,000		—		70,000
The 190-3rd Public bond	Jan. 30, 2028	2.947%		—		170,000		—		170,000
The 190-4th Public bond	Jan. 30, 2038	2.931%		—		70,000		—		70,000
The 191-2nd Public bond	Jan. 15, 2024	—		—		—		—		80,000
The 191-3rd Public bond	Jan. 15, 2029	2.160%		—		110,000		—		110,000
The 191-4th Public bond	Jan. 14, 2039	2.213%		—		90,000		—		90,000
The 192-2nd Public bond	Oct. 11, 2024	1.578%		—		100,000		—		100,000
The 192-3rd Public bond	Oct. 11, 2029	1.622%		—		50,000		—		50,000
The 192-4th Public bond	Oct. 11, 2039	1.674%		—		110,000		—		110,000
The 193-2nd Public bond	Jun. 17, 2025	1.434%		—		70,000		—		70,000
The 193-3rd Public bond	Jun. 17, 2030	1.608%		—		20,000		—		20,000
The 193-4th Public bond	Jun. 15, 2040	1.713%		—		60,000		—		60,000
The 194-1st Public bond	Jan. 26, 2024	—		—		—		—		130,000
The 194-2nd Public bond	Jan. 27, 2026	1.452%		—		140,000		—		140,000
The 194-3rd Public bond	Jan. 27, 2031	1.849%		—		50,000		—		50,000
The 194-4th Public bond	Jan. 25, 2041	1.976%		—		80,000		—		80,000
The 195-1st Public bond	Jun. 10, 2024	—		—		—		—		180,000
The 195-2nd Public bond	Jun. 10, 2026	1.806%		—		80,000		—		80,000

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won and foreign currencies in thousands)			June 30, 2024					December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won			Foreign currency		Korean won
The 195-3rd Public bond	Jun. 10, 2031	2.168%		—	W	40,000			—	W	40,000
The 196-1st Public bond	Jan. 27, 2025	2.596%		—		270,000			—		270,000
The 196-2nd Public bond	Jan. 27, 2027	2.637%		—		100,000			—		100,000
The 196-3rd Public bond	Jan. 27, 2032	2.741%		—		30,000			—		30,000
The 197-1st Public bond	Jun. 27, 2025	4.191%		—		280,000			—		280,000
The 197-2nd Public bond	Jun. 29, 2027	4.188%		—		120,000			—		120,000
The 198-1st Public bond	Jan. 10, 2025	3.847%		—		70,000			—		70,000
The 198-2nd Public bond	Jan. 12, 2026	3.869%		—		150,000			—		150,000
The 198-3rd Public bond	Jan. 12, 2028	3.971%		—		80,000			—		80,000
The 199-1st Public bond	Jul. 11, 2025	4.028%		—		85,000			—		85,000
The 199-2nd Public bond	Jul. 10, 2026	4.146%		—		160,000			—		160,000
The 199-3rd Public bond	Jul. 12, 2028	4.221%		—		155,000			—		155,000
The 200-1st Public bond	Feb. 27, 2026	3.552%		—		120,000			—		—
The 200-2nd Public bond	Feb. 26, 2027	3.608%		—		200,000			—		—
The 200-3rd Public bond	Feb. 27, 2029	3.548%		—		80,000			—		—

Subtotal						7,081,317					6,976,921
Less: Current portion						(1,689,037	)				(1,224,741	)
Discount on bonds						(17,282	)				(18,468	)

Total					W	5,374,998				W	5,733,712

As of June 30, 2024, the Company has outstanding notes in the amount of USD 100 million with fixed interest rates under Medium Term Note Program (“MTNP”) registered on the Singapore Stock Exchange, which allowed the issuance of notes of up to USD 2,000 million. However, the MTN program has been terminated since 2007.

²	The Daily SOFR is approximately 5.330% as of June 30, 2024.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

Long-Term Borrowings


(In millions of Korean won and foreign currencies in thousands)
Financial institution	Type		Maturity		Annual interest rates			June 30, 2024			December 31, 2023
Export-Import Bank of Korea		Inter-Korean Cooperation Fund ¹		Jul. 10, 2026		1.000	%	W	1,234			1,480
CA-CIB		Long-term commercial papers		May. 28, 2024		—			—			100,000
				Mar. 15, 2024		—			—			100,000
				May. 28, 2027		3.820	%		100,000			—
JPM		Long-term commercial papers		Feb. 28, 2025		2.700	%		100,000			100,000
				Mar. 15, 2024		—			—			100,000
DBS		Long-term commercial papers		Jun. 28, 2024		—			—			100,000
				May. 28, 2027		3.820	%		100,000			—
KDB		Long-term commercial papers		Mar. 14, 2024		—			—			100,000
Shinhan Bank		Long-term commercial papers		May. 28, 2027		4.09	%		100,000			—

Subtotal									401,234			601,480
Less: Current portion									(100,493	)		(500,493	)

Net								W	300,741			100,987

¹	The above Inter-Korean Cooperation Fund is repayable in installments over 13 years after a 7-year grace period.

(2)

Repayment schedule of the Company’s debentures and borrowings including the portion of current liabilities as of June 30, 2024, is as follows:


(In millions of Korean won)	Bonds
	In local currency		In foreign currency		Sub-total		Borrowings		Total
Jul. 1, 2024 ~ Jun. 30, 2025	W	1,200,000		489,677		1,689,677		100,493		1,790,170
Jul. 1, 2025 ~ Jun. 30, 2026		675,000		1,250,280		1,925,280		493		1,925,773
Jul. 1, 2026 ~ Jun. 30, 2027		580,000		972,440		1,552,440		248		1,552,688
Jul. 1, 2027 ~ Jun. 30, 2028		250,000		—		250,000		—		250,000
After Jul. 1, 2028		1,525,000		138,920		1,663,920		300,000		1,963,920

Total	W	4,230,000		2,851,317		7,081,317		401,234		7,482,551

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

13.

Provisions

Changes in provisions for the six-month period ended June 30, 2024 and 2023, are as follows:


	2024
(In millions of Korean won)	Litigation			Restoration cost			Others			Total
Beginning balance	W	25,879			115,747			40,728			182,354
Increase (transfer)		26			3,146			(43	)		3,129
Usage		(1,222	)		(588	)		(185	)		(1,995	)
Reversal		(3,093	)		(443	)		—			(3,536	)

Ending balance	W	21,590			117,862			40,500			179,952

Less: Current		(21,590	)		(23,116	)		(40,476	)		(85,182	)
Non-current		—			94,746			24			94,770


	2023
(In millions of Korean won)	Litigation			Restoration cost			Others			Total
Beginning balance	W	30,938			96,667			39,489			167,094
Increase (transfer)		—			10,417			1,345			11,762
Usage		—			(495	)		(161	)		(656	)
Reversal		—			(472	)		—			(472	)

Ending balance	W	30,938			106,117			40,673			177,728

Less: Current		(30,938	)		(17,651	)		(40,375	)		(88,964	)
Non-current		—			88,466			298			88,764

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

14.

Net Defined Benefit Assets

(1)

The amounts recognized in the statements of in the statements of financial position as of June 30, 2024 and December 31, 2023, are determined as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Present value of defined benefit obligations	W	1,622,584			1,548,588
Fair value of plan assets		(1,651,054	)		(1,609,178	)

Liabilities (Assets), net	W	(28,470	)		(60,590	)

(2)

Changes in the defined benefit obligations for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning	W	1,548,588			1,493,655
Current service cost		56,177			54,555

Interest expense		30,823			36,665

Benefits paid		(13,004	)		(14,526	)

Ending	W	1,622,584			1,570,349

(3)

Changes in the fair value of plan assets for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Beginning	W	1,609,178			1,674,344
Interest income		32,084			41,301
Remeasurements on plan assets		241			3,072
Benefits paid		(16,349	)		(15,859	)
Others		25,900			23,013

Ending	W	1,651,054			1,725,871

(4)

Amounts recognized in the separate statements of profit or loss for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Current service cost	W	56,177			54,555
Net interest expense		(1,261	)		(4,636	)
Account transfers		(7,576	)		(6,303	)

Total expense	W	47,340			43,616

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

15.

Commitments and Contingencies

(1)

As of June 30, 2024, major Covenants with local financial institutions are as follows:


(In millions of Korean won and foreign currencies in thousands)
	Financial institution	Limit		Used amount
Bank overdraft	Kookmin Bank and others	W	360,000		—
Working capital loan	Korea Development Bank and others		1,120,000		100,000
Inter-Korean Cooperation Fund	Export-Import Bank of Korea		37,700		1,234
Economic Cooperation Business Insurance	Export-Import Bank of Korea		3,240		1,732
Collateralized loan on electronic accounts receivable-trade	Kookmin Bank and others		247,000		23,574
Plus electronic notes payable	Industrial Bank of Korea		50,000		3,370
Derivatives transaction limit	Korea Development Bank and others	USD	1,970,000	USD	1,970,000
	Citi Bank	JPY	400,000	JPY	400,000

	KRW		1,817,940		129,910
Total	USD		1,970,000		1,970,000
	JPY		400,000		400,000

(2)

As of June 30, 2024, guarantees received from financial institutions are as follows:


(In millions of Korean won and foreign currencies in thousands)
	Warranty details	Limit
Hana Bank	Comprehensive credit line	W	3,100
		USD	8,700
Shinhan Bank	Guarantee for payment in foreign currency and others	USD	34,517
Kookmin Bank	Guarantee for payment in foreign currency	USD	3,186
Woori Bank	Guarantee for payment in foreign currency	USD	5,000
Korea Development Bank	Refund guarantee for advances received	USD	6,811
Korea Software Financial Cooperative	Advance payment/other guarantee and others		1,036,297
Seoul Guarantee Insurance Company	Performance guarantee and others		27,612

Total	KRW		1,067,009
	USD		58,214

(3)

The Company is jointly and severally obligated with KT Sat Co., Ltd. to pay KT Sat Co., Ltd.’s liabilities incurred prior to its spin-off. As of June 30, 2024, the Company and KT Sat Co., Ltd. are jointly and severally liable for reimbursement of W434 million.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(4)

For the six-month period ended June 30, 2024, the Company entered into agreements with Securitization Specialty Companies (2024: First 5G 73^rd to 75^th Securitization Specialty Co., Ltd., 2023: First 5G 67^th to 72^nd Securitization Specialty Co., Ltd.) and disposed of its trade receivables related to handset sales. The Company also made asset management agreements with each securitization specialty company and in accordance with the agreement, the Company will receive asset management fees upon liquidation of the securitization specialty company.

(5)

As of June 30, 2024, the Company is a defendant in 125 lawsuits with a total claimed amount of W137,207 million. As of June 30, 2024, litigation provisions of W21,590 million for pending lawsuits and unasserted claims are recorded as liabilities for potential loss in the ordinary course of business. The final outcomes of the cases cannot be estimated as of June 30, 2024 (Note 13).

(6)

According to the financial and other covenants included in certain debentures and borrowings, the Company is required to maintain certain financial ratios such as debt-to-equity ratio, use the funds for the designated purpose and report to the creditors periodically. The covenant also contains restrictions on provision of additional collateral and disposal of certain assets.

(7)

As of June 30, 2024, the Company participates in Algerie Sidi Abdela new town development consortium (percentage of ownership: 2.5%) and has joint liability with other consortium participants.

(8)

As of June 30, 2024, the contract amount of properties and equipment acquisition agreements made but not yet recognized amounts to W355,145 million (December 31, 2023: W449,883 million).

(9)

The Company entered into an agreement with financial investors of Epsilon Global Communications Pte., Ltd. regarding the acquisition of shares contract. If certain conditions are not met in the future as disclosed in the terms and conditions of the agreement, financial investors may exercise the Tag-Along Right, Drag-Along Right, or the right to sell shares for the convertible preferred shares they hold (Note 6).

(10)

The Company has an obligation for additional contributions as per agreement to Storm Ventures FUND VII and others. As of June 30, 2024, remaining amounts of USD 33,900 thousand and JPY 320,000 thousand will be invested through the Capital Call method in the future.

(11)

The Company has the amount of W201,615 million (40%) of joint responsibility obligation and W302,423 million (60%) of obligation to provide financial support as a construction investor during the construction period with respect to K Defense Co., Ltd. established in accordance with the Private Investment Act on Social Infrastructure. During the operating period, the Company has the amount of W438,312 million (100%) of obligation to provide financial support as an operating investor.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(12)

The Company entered into a stock sale contract with HYUNDAI MOBIS and HYUNDAI MOTOR COMPANY. If a certain period of time has elapsed from the date of the contract and the acquired stocks are to be disposed to a third party, HYUNDAI MOBIS and HYUNDAI MOTOR COMPANY may exercise a preferential purchase right to designate a buyer with priority.

(13)

The Company entered into an agreement with LS Cable & System Ltd., which participated in the stock acquisition contract of LS Marine Solution Co., Ltd. Under the agreement, the company may exercise a Put-Option to LS Cable & System Ltd. in the future. (Note 6).

(14)

During the prior period, the Company entered into an agreement with equity investors which participated in the stock acquisition contract of kt cloud Co., Ltd., Under the agreement, in specific occasion, equity investors may exercise a Tag-along or Put-Option to the Company in the future.

(15)

The Company has the obligation of paying Minimum Guarantee as utilizing product bundling of Tving Co., Ltd., and the right to be paid certain proportion of the excess as per agreement.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

16.

Leases

Information for leases when the Company acts as a lessee is as follows. Information on leases when the Company acts as a lessor is described in Note 9.

(1)

The separate statements of financial position shows the following amounts relating to leases:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Right-of-use assets
Property and buildings	W	841,719		853,425
Machinery and communication line facilities		45,225		50,242
Others		67,741		72,958

Total	W	954,685		976,625


(In millions of Korean won)	June 30, 2024		December 31, 2023
Lease liabilities ¹
Current	W	242,567		226,590
Non-current		583,816		625,020

Total	W	826,383		851,610

¹	Included in the line item other current liabilities and non-current liabilities in the separate statements of financial position (Note 8).

For the six-month periods ended June 30, 2024 and 2023, right-of-use assets related to leases increased by W152,269 million and W155,436 million, respectively.

(2)

The separate statements of profit or loss shows the following amounts relating to leases:


(In millions of Korean won)	2024		2023
Depreciation of right-of-use assets
Property and building	W	142,006		142,301
Machinery and communication line facilities		12,690		13,108
Others		15,701		13,634

Total	W	170,397		169,043

Interest expense relating to lease liabilities		18,709		19,218
Expense relating to Short-term leases		2,209		1,877
Expense relating to leases of low-value assets that are not short-term leases		4,224		5,487

The total cash outflow for leases for the six-month periods ended June 30, 2024 and 2023 is W194,201 million and W185,219 million, respectively.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

17.

Retained Earnings

Details of retained earnings as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Legal reserve ¹	W	782,249		782,249
Voluntary reserves²		4,651,362		4,651,362
Unappropriated retained earnings		6,970,550		7,110,814

Total	W	12,404,161		12,544,425

The Commercial Code of the Republic of Korea requires the Company to appropriate, as a legal reserve, an amount equal to a minimum of 10% of cash dividends paid until such reserve equals 50% of its issued share capital. The reserve is not available for the payment of cash dividends but may be transferred to share capital with the approval of the Company’s Board of Directors or used to reduce accumulated deficits, if any, with the ratification of the Company’s majority shareholders.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

18.

Other Components of Equity

(1)

The Company’s other components of equity as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024			December 31, 2023
Treasury stock	W	(215,459	)		(398,075	)
Gain(Loss) on disposal of treasury stock		(69	)		301
Share-based compensation		4,486			8,773
Other		(180,870	)		(180,871	)

Total	W	(391,912	)		(569,872	)

(2)

As of June 30, 2024 and December 31, 2023, details of treasury stock, are as follows:


	June 30, 2024		December 31, 2023
Number of shares (in shares)		6,195,910		11,447,338
Amount (in millions of Korean won)	W	215,459		398,075

Treasury stock held as of June 30, 2024, is expected to be utilized for stock compensation for the Company’s directors, employees, and for other purposes.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

19.

Revenue from Contracts with Customers and Relevant Contract Assets and Liabilities

(1)

The Company has recognized the following amounts relating to revenue in the separate statement of profit or loss:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Revenue from contracts with customers	W	4,488,597		9,126,296		4,430,287		8,993,017
Revenue from other sources		59,699		116,828		57,131		113,395

Total	W	4,548,296		9,243,124		4,487,418		9,106,412

(2)

Operating revenues for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Services provided	W	4,048,038		8,088,606		4,018,611		7,971,223
Sales of goods		500,258		1,154,518		468,807		1,135,189

Total	W	4,548,296		9,243,124		4,487,418		9,106,412

Revenue from services provided is recognized over time and revenue from sales of goods are recognized at a point in time.

(3)

The Contract assets, liabilities and deferred revenue recognized in relation to the revenues from contracts with customers, are as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Contract assets¹	W	1,000,073		1,069,514
Contract liabilities¹		265,878		291,997
Deferred revenue²		71,985		70,314

The Company recognized contract assets of W224,554 and, contract liabilities of W32,624 million for long-term construction contracts as of June 30, 2024 (As of December 31, 2023: contract assets and liabilities of W295,079 million and W32,273 million, respectively). The Company recognizes contract asset as trade receivables and other receivables, and contract liabilities as other current liabilities.

²	Deferred revenue related to government grants is excluded.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(4)

The contract costs recognized as assets are as follows:


(In millions of Korean won)	June 30, 2024		December 31, 2023
Incremental cost of obtaining a contract	W	1,611,205		1,647,156
Cost of contract performance		155,102		157,292

Total	W	1,766,307		1,804,448

The Company recognized W920,922 million as operating expenses for the six-month period ended June 30, 2024 (six-month period ended June 30, 2023: W946,595 million) related to contract cost assets.

The Company did not recognize an impairment loss in anticipation of full recovery of costs recognized as assets.

(5)

For the three- and six-month periods ended June 30, 2024 and 2023, the revenue recognition arising from carried-forward contract liabilities and deferred revenue from prior year, is as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Revenue recognized from the beginning balance of contract liabilities
Allocation of the transaction price	W	49,971		107,651		53,426		117,435
Deferred revenue of joining/installment fees		9,615		20,225		9,679		20,360

Total	W	59,586		127,876		63,105		137,795

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

20.

Operating Expenses

(1)

Operating expenses for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024						2023
	Three-month			Six-month			Three-month		Six-month
Salaries and wages	W	631,312			1,172,032			583,266		1,113,418
Depreciation		603,709			1,204,206			579,976		1,154,267
Depreciation of right-of-use assets		50,909			170,367			84,005		169,043
Amortization of intangible assets		149,331			234,678			118,617		238,511
Commissions		484,353			948,222			465,359		909,190
Interconnection charges		102,165			212,091			109,660		220,898
International interconnection fees		26,425			63,285			44,245		92,019
Purchase of inventories		586,448			1,204,874			341,221		1,110,843
Changes in inventories		(93,878	)		(36,017	)		120,064		89,795
Sales promotion expense and sales commissions		618,582			1,239,182			637,152		1,263,112
Service costs		201,694			401,126			181,808		364,503
Purchase of contents		174,325			349,591			152,634		299,551
Utilities		95,626			188,988			90,954		178,646
Taxes and dues		49,972			101,172			51,031		103,115
Rent		31,293			59,178			28,674		57,358
Insurance premiums		10,023			24,115			11,511		26,167
Installation fees		115,970			228,048			109,932		220,791
Advertising expenses		33,570			57,726			29,719		55,354
Research and development expenses		57,553			117,624			49,932		99,406
Bad debt expenses		12,145			25,297			14,100		27,421
Others		247,911			524,708			276,134		517,437

Total	W	4,189,438			8,490,493			4,079,994		8,310,845

(2)

Details of employee benefits for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024					2023
	Three-month			Six-month		Three-month		Six-month
Short-term employee benefits	W	586,232			1,082,114		538,964		1,028,371
Post-employment benefits (defined benefits)		23,495			47,340		21,775		43,616
Post-employment benefits (defined contributions)		16,049			28,403		13,069		27,092
Share-based compensation		(101	)		1,738		5,180		6,736
Others		5,637			12,437		4,278		7,603

Total	W	631,312			1,172,032		583,266		1,113,418

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

21.

Other Income and Other Expenses

(1)

Other income for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Gain on disposal of property and equipment	W	5,017		22,279		4,704		12,210
Gain on disposal of right-of-use assets		1,184		1,559		1,325		1,650
Gain on disposal of intangible assets		—		99		—		—
Compensation on impairment of property and equipment		35,515		65,600		37,836		69,848
Gain on disposal of investments in subsidiaries and associates		30,882		30,882		—		5
Dividends received		5,173		39,146		65		60,707
Gain on government subsidies		4,856		14,207		7,957		17,359
Others		3,630		12,352		3,192		9,820

Total	W	86,257		186,124		55,079		171,599

(2)

Other expenses for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Loss on disposal of properties and equipments	W	18,807		32,558		17,442		29,771
Loss on disposal of right-of-use assets		979		1,273		687		916
Loss on disposal of intangible assets		1,473		7,117		2,436		2,995
Loss on disposal of investments in subsidiaries and associate		3,154		3,154		—		—
Donations		25		2,685		17		15,277
Others		13,482		39,404		42,767		63,052

Total	W	37,920		86,191		63,349		112,011

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

22.

Finance Income and Costs

(1)

Details of financial income for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Interest income	W	56,962		113,773		50,050		105,009
Gain on foreign currency transactions		3,216		4,766		3,782		6,989
Gain on foreign currency translation		15,888		19,067		8,418		10,453
Gain on transaction of derivatives		—		—		3,132		3,132
Gain on valuation of derivatives		83,929		197,811		7,388		94,896
Gain on disposal of trade receivables		—		—		3,441		3,441
Gain on dividends		10,429		39,648		32,577		32,580
Gain on disposal of financial assets		526		4,990		69		892
Gain on valuation of financial assets		2,746		2,746		706		706

Total	W	173,696		382,801		109,563		258,098

(2)

Details of financial costs for the three- and six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024				2023
	Three-month		Six-month		Three-month		Six-month
Interest expenses	W	70,687		138,561		77,362		142,588
Loss on foreign currency transactions		2,557		4,003		6,243		9,776
Loss on foreign currency translation		86,598		205,150		8,431		97,824
Loss on valuation of derivatives		100		193		185		185
Loss on disposal of trade receivables		3,227		3,587		2,129		7,065
Loss on valuation of financial assets		7,057		7,057		19,716		33,471
Loss on disposal of financial assets		1,551		1,551		—		—

Total	W	171,777		360,102		114,066		290,909

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

23.

Income Tax Expense

Income tax expense is recognized based on the best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual effective income tax rate used for the year ending December 31, 2024, is 23.6%.

24.

Earnings per Share

Basic earnings per share for the three- and six-month periods ended June 30, 2024 and 2023, are calculated as follows:

(1)

Basic Earnings per Share


	2024				2023
	Three-month		Six-month		Three-month		Six-month
Profit attributable to ordinary shares (In millions of Korean won)	W	314,500		668,531		305,055		624,920
Weighted average number of ordinary shares outstanding (In number of shares)		245,756,858		245,993,685		249,590,243		252,588,190

Basic earnings per share (In Korean won)	W	1,280		2,718		1,222		2,474

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Diluted Earnings per Share

Diluted earnings per share from operations is calculated by adjusting the weighted average number of ordinary shares outstanding assuming that all dilutive potential ordinary shares are converted into ordinary shares. The Company has dilutive potential ordinary shares from other share-based compensation.


	2024				2023
	Three-month		Six-month		Three-month		Six-month
Profit attributable to ordinary shares (In millions of Korean won)	W	314,500		668,531		305,055		624,920
Diluted profit attributable to ordinary shares (In millions of Korean won)		314,500		668,531		305,055		624,920
Number of dilutive potential ordinary shares outstanding (In number of shares)		25,111		66,620		135,219		123,912
Weighted average number of ordinary shares outstanding (In number of shares)		245,781,969		246,060,305		249,725,462		252,712,111

Diluted earnings per share (In Korean won)	W	1,280		2,717		1,222		2,473

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

25.

Cash Generated from Operations

(1)

Cash flows from operating activities for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
1. Profit for the period	W	668,531			624,920
2. Adjustments for:
Income tax expense		206,732			197,424
Interest income		(113,773	)		(105,009	)
Interest expense		138,561			141,697
Dividend income		(78,794	)		(93,288	)
Depreciation		1,224,042			1,177,331
Amortization of intangible assets		239,188			239,942
Depreciation of right-of-use assets		170,397			169,043
Provisions for post-employment benefits (defined benefits)		54,916			49,919
Allowance for bad debts		38,827			37,712
Gain on disposal of investments in subsidiaries, associates and joint ventures		(27,728	)		(5	)
Loss on disposal of property and equipment		10,279			17,561
Loss on disposal of intangible assets		7,018			2,995
Gain on disposal of right-of-use assets		(286	)		(734	)
Loss on foreign currency translation		186,083			87,371
Gain on valuation of derivatives, net		(197,618	)		(75,587	)
Loss on valuation of financial assets at fair value through profit or loss		4,311			10,509
Gain on disposal of financial assets at fair value through profit or loss		(3,440	)		(892	)
Others		(20,485	)		10,166
3. Changes in operating assets and liabilities
Decrease in trade receivables		86,935			123,299
Decrease in other receivables		24,626			1,521
Increase in other current assets		(56,778	)		(48,762	)
Decrease in other non-current assets		24,318			19,084
Decrease (Increase) in inventories		(11,885	)		94,416
Increase in trade payables		216,668			122,742
Decrease in other payables		(57,776	)		(222,477	)
Increase (decrease) in other current liabilities		(42,138	)		1,382
Decrease in other non-current liabilities		(14,286	)		(12,004	)
Increase (decrease) in provisions		(627	)		1,943
Increase (decrease) in deferred revenue		2,974			(11,961	)
Payment of post-employment benefits (defined benefits)		(149,111	)		(123,868	)
Decrease in plan assets		111,477			88,298

4. Cash generated from operations (1+2+3)	W	2,641,158			2,524,688

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Significant transactions not affecting cash flows for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024			2023
Reclassification of the current portion of borrowings	W	1,029,232			999,724
Reclassification of construction-in-progress to property and equipment		882,119			1,127,413
Change of other payables relating to acquisition of property and equipment		71,454			(231,455	)
Change of other payables relating to acquisition of intangible assets		(272,955	)		(304,125	)
Reclassification of other payables from net defined benefit liabilities		(15,079	)		(13,890	)
Increase in financial assets due to stock exchange		52,841			—

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

26.

Changes in Liabilities Arising from Financing Activities

Details of changes in liabilities related to cash flows that have been classified as financing activities or will be classified as financing activities in the separate statement of cash flows for the six-month periods ended June 30, 2024 and 2023 are as follows:


(In millions of Korean won)	2024
							Others
	Beginning			Cash flows			Acquisition		Changes in FX rate			Fair value change		Other changes			Ending
Borrowings	W	7,559,933			(301,547	)		—		203,622			—		3,261			7,465,269
Lease liabilities		851,610			(169,455	)		163,424		—			—		(19,196	)		826,383
Derivative liabilities		23,077			—			—		193			42		(22,417	)		895
Derivative assets		(156,774	)		—			—		(196,606	)		11,060		22,417			(319,903	)

Total	W	8,277,846			(471,002	)		163,424		7,209			11,102		(15,935	)		7,972,644


(In millions of Korean won)	2023
							Others
	Beginning			Cash flows			Acquisition		Changes in FX rate			Fair value change		Other changes			Ending
Borrowings	W	7,495,561			(263,343	)		—		97,148			—		7,700			7,337,066
Lease liabilities		865,280			(160,719	)		158,293		—			—		(21,902	)		840,951
Derivative liabilities		32,402			—			—		(22,564	)		6,957		—			16,795
Derivative assets		(185,989	)		24,935			—		(71,435	)		29,190		(3,131	)		(206,430	)

Total	W	8,207,254			(399,127	)		158,293		3,149			36,147		(17,333	)		7,988,382

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

27.

Related Party Transactions

(1)

The list of related parties of the Company as of June 30, 2024, is as follows:


Relationship		Name of Entity
Subsidiaries		82 entities including KT Estate Inc., KT Skylife Co., Ltd., BC Card Co., Ltd.

Associates and joint ventures		53 entities including K Bank Inc., KIF Investment Fund, Megazone Cloud Corporation, KIAMCO Data Center Development Real Estate General Private Placement Investment Blind Trusts

Others¹		Goody Studio Co., Ltd., Rebellion Inc., Digital Pharm Co., Ltd., Mastern No.127 Logispoint Daegu Co., Ltd., KORAMKO No. 143 General Private Real Estate Investment Company

¹	Included within the scope of related parties under Korean IFRS 1024 due to the presence of significant influence, even though treated in accordance with Korean IFRS 1109

(2)

The amount of the installment handset sales receivable inherited from KTIS Corporation, KTCS Corporation, KT Telecop Co., Ltd., KT M&S Co., Ltd. and KT Service Nambu Co., Ltd. for the year ended June 30, 2024 is W248,141 million.

(3)

The Company has entered into an additional agreement in relation to providing communication service in wholesale with KT M Mobile Co., Ltd. in connection with the agreement, the Company offsets all or partial receivables against payables for joining mobile telecommunication services and usage of network arising from telecommunication operations.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(4)

Outstanding balances of receivables and payables in relation to transaction with related parties as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024
	Receivables						Payables
	Trade receivables		Loans and others		Other receivables		Trade payables		Other payables		Lease liabilities
Subsidiaries
KT Linkus Co., Ltd.	W	41		—		—		—		11,798		—
KT Telecop Co., Ltd.		208		—		766		1,561		26,970		—
KTCS Corporation		133		—		5,821		—		59,428		5
KTIS Corporation		10,843		—		48		—		47,868		—
KT Service Bukbu Co., Ltd.		24		—		—		—		19,152		—
KT Service Nambu Co., Ltd.		1		—		—		—		23,133		—
KT Skylife Co., Ltd.		35,377		—		12,708		1,154		16,459		—
KTDS Co., Ltd.		974		—		714		38,832		76,500		—
KT Estate Inc.		821		—		41,881		—		14,246		12,619
Skylife TV Co., Ltd.		17		—		14		—		2,644		—
BC Card Co., Ltd. ¹		7,210		—		7		—		6,756		7
KT Sat Co., Ltd.		1,617		—		—		—		1,829		—
KT Alpha Co., Ltd.		5,572		—		82		1,182		8,866		—
KT Commerce Inc.		100		—		59		3,054		32,885		1,956
KT M&S Co., Ltd.		10		5,775		113		—		49,720		—
GENIE Music Corporation		13,714		—		930		—		14,896		—
KT M Mobile Co., Ltd.		51,605		—		3		—		6,326		—
Nasmedia, Inc.		2,201		—		—		—		824		—
KT MOS Bukbu Co., Ltd.		11		—		—		—		15,212		—
KT MOS Nambu Co., Ltd.		—		—		89		—		14,184		—
KT Engineering Co., Ltd		24		—		1,183		76		62,203		—
KT Studio Genie Co., Ltd.		11		—		7,040		—		24,998		—
Kt cloud Co., Ltd.		22,847		—		2		—		41,835		134
East Telecom LLC		5,646		14,410		—		83		—		—
Others		14,019		—		10,009		3,169		10,148		17
Associates and joint ventures
K Bank Inc.		442		—		2,413		—		2		—
Others		301		—		3		—		5,183		1,217
Others
Others		2		—		—		—		—		—

Total	W	173,771		20,185		83,885		49,111		594,065		15,955

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	December 31, 2023
	Receivables						Payables
	Trade receivables		Loans and others		Other receivables		Trade payables		Other payables		Lease liabilities
Subsidiaries
KT Linkus Co., Ltd.	W	13		—		3		—		13,404		—
KT Telecop Co., Ltd.		426		—		644		2,534		26,002		—
KTCS Corporation		140		—		8,316		—		52,542		5
KTIS Corporation		11,258		—		25		—		47,246		—
KT Service Bukbu Co., Ltd.		19		—		4		—		24,375		—
KT Service Nambu Co., Ltd.		—		—		9		—		24,653		—
KT Skylife Co., Ltd.		37,070		—		11,062		—		8,457		—
KTDS Co., Ltd.		1,633		—		3,361		1,107		132,711		—
KT Estate Inc.		1,202		—		42,614		—		22,861		1,677
Skylife TV Co., Ltd.		54		—		—		—		2,289		—
BC Card Co., Ltd. ¹		699		—		6,443		—		1,123		3
KT Sat Co., Ltd.		1,272		—		1		—		1,908		—
KT Alpha Co., Ltd.		4,684		—		79		—		9,226		—
KT Commerce Inc.		167		—		2		8,124		19,296		—
KT M&S Co., Ltd.		240		8,400		243		—		95,671		—
GENIE Music Corporation		13,714		—		434		—		17,741		—
KT M Mobile Co., Ltd.		47,214		—		48		—		5,812		—
Nasmedia, Inc.		1,992		—		3		—		686		—
KT MOS Bukbu Co., Ltd.		10		—		8		—		15,605		—
KT MOS Nambu Co., Ltd.		—		—		119		—		12,899		—
KT Engineering Co., Ltd		18		—		809		2,370		82,831		—
KT Studio Genie Co., Ltd.		9		—		1,339		—		30,737		—
Kt cloud Co., Ltd.		11,403		—		10		—		61,919		330
East Telecom LLC		5,045		12,704		—		69		—		—
Others		5,571		—		136		1,906		11,848		23
Associates and joint ventures
K Bank Inc.		203		—		101,267		—		1		—
Others		256		—		3		—		521		1,331

Total	W	144,312		21,104		176,982		16,110		722,364		3,369

¹	As of June 30, 2024, the unsettled amount of W6,666 million (December 31, 2023: W1,002 million) in credit card transaction with BC Card Co., Ltd. is included in trade payables.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(5)

Significant transactions with related parties for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024
	Sales				Purchases
	Operating revenue		Other income		Operating expenses		Others ¹		Acquisition of right-of- use assets		Finance income		Finance costs		Dividends received
Subsidiaries
KT Linkus Co., Ltd.¹	W	2,747		12		29,643		5		1		—		—		—
KT Telecop Co., Ltd.¹		3,543		—		68,228		10		—		2		—		—
KTCS Corporation		44,048		2		172,923		1		—		—		—		318
KTIS Corporation¹		32,369		104		165,871		595		—		—		—		1,224
KT Service Bukbu Co., Ltd.¹		5,390		—		105,135		931		—		—		—		—
KT Service Nambu Co., Ltd.¹		6,731		—		127,772		1,283		—		—		—		—
KT Skylife Co., Ltd.¹		70,782		1		9,095		30		—		—		—		8,368
KTDS Co., Ltd.¹		6,690		—		216,193		27,325		—		—		—		4,848
KT Estate Inc.¹		25,895		11		40,344		693		24,466		—		349		8,600
Skylife TV Co., Ltd.		6,232		—		5,461		—		—		—		—		—
BC Card Co., Ltd.		4,680		—		14,739		—		4		2		—		4,589
KT Sat Co., Ltd.		3,782		—		5,706		—		—		—		—		—
KT Alpha Co., Ltd.		30,691		—		21,847		—		—		2		—		—
KT Commerce Inc.¹		598		—		39,275		59,696		1,144		—		18		—
KT M&S Co., Ltd.		143,653		16		132,553		—		—		—		—		—
GENIE Music Corporation		188		—		27,121		—		—		—		—		—
KT M Mobile Co., Ltd.		125,842		44		1,409		—		—		—		—		—
Nasmedia, Co., Ltd.		152		2		1,506		—		—		—		—		3,487
KT MOS Nambu Co., Ltd.¹		933		—		46,192		3,375		—		—		—		—
KT MOS Bukbu Co., Ltd.¹		1,531		—		45,799		3,567		—		—		—		—
KT Engineering Co., Ltd.¹		1,637		—		19,972		69,251		—		—		—		—
KHS Corporation		7		—		3,980		—		—		—		—		—
KT Studio Genie Co., Ltd.¹		94		—		3,704		20,227		—		—		—		—
Kt cloud Co., Ltd.		48,094		—		76,144		259		1		—		5		—
Others		13,578		355		52,241		257		10		2		—		3,861
Associates and joint ventures
K Bank Inc.		2,196		—		105		—		—		918		—		—
Others		1,535		—		2,783		—		19		—		25		3,850
Others
Rebellions Co., Ltd.		16		—		—		—		—		—		—		—

Total	W	583,634		547		1,435,741		187,505		25,645		926		397		39,145

¹	The amount of acquisition of properties, equipment and others is included.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	2023
	Sales				Purchases
	Operating revenue		Other income		Operating expenses		Others ¹		Acquisition of right-of- use assets		Finance income		Finance costs		Dividends received
Subsidiaries
KT Linkus Co., Ltd.	W	3,397		1		29,649		—		1		—		—		—
KT Telecop Co., Ltd.		3,318		33		82,692		—		—		6		—		—
KTCS Corporation		44,595		2		165,320		—		—		—		—		381
KTIS Corporation		36,163		—		164,839		—		—		—		—		1,224
KT Service Bukbu Co., Ltd.		7,503		—		108,535		—		—		—		—		—
KT Service Nambu Co., Ltd.		7,560		—		125,141		—		—		—		—		—
KT Skylife Co., Ltd.		57,019		8		12,410		—		—		—		—		8,368
KTDS Co., Ltd.		6,210		—		222,850		—		—		1		—		7,560
KT Estate Inc. ¹		27,360		22		41,278		491		24,487		—		424		17,500
Skylife TV Co., Ltd.		7,562		—		5,184		—		—		—		—		—
BC Card Co., Ltd.		4,763		14		16,432		—		—		3		—		11,320
KT Sat Co., Ltd.		3,992		—		5,253		—		—		—		—		7,000
KT Alpha Co., Ltd.		31,776		—		17,246		—		—		1		—		—
KT Commerce Inc. ¹		709		—		41,899		37,819		—		—		—		—
KT M&S Co., Ltd.		145,460		21		126,603		—		—		—		—		—
GENIE Music Corporation		450		—		26,089		—		—		—		—		—
KT M Mobile Co., Ltd.		107,018		22		4,279		—		—		—		—		—
Nasmedia, Co., Ltd.		257		—		1,983		—		—		—		—		3,170
KT MOS Nambu Co., Ltd.		923		—		47,125		—		—		—		—		—
KT MOS Bukbu Co., Ltd.		1,368		—		47,561		—		—		—		—		—
KT Engineering Co., Ltd. ¹		478		—		12,507		52,856		—		—		—		—
KHS Corporation		2		—		4,189		—		—		—		—		—
KT Studio Genie Co., Ltd. ¹		61		—		12,234		41,638		—		—		—		—
Kt cloud Co., Ltd.		50,945		—		67,663		—		776		—		5		—
Others ²		12,359		8		41,930		1		10		—		1		3,045
Associates and joint ventures
K Bank Inc.		1,197		—		74		—		—		1,355		—		—
Others ³		579		67		2,866		—		34		—		36		1,139

Total	W	563,024		198		1,433,831		132,805		25,308		1,366		466		60,707

¹	The amount of acquisition of properties, equipments and others is included.

²	Transactions with KT Strategic Investment Fund No.2 before it was excluded from subsidiary are included.

³	Transactions with KT living Inc. (formerly KD living Inc.) before it was classified as subsidiary are included.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(6)

Key management compensation for the six-month periods ended June 30, 2024 and 2023, consists of:


(In millions of Korean won)	2024		2023
Salaries and other short-term benefits	W	824		619
Post-employment benefits		97		71
Stock-based compensation		332		302

Total	W	1,253		992

(7)

Fund transactions with related parties for the six-month periods ended June 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024
	Loan transactions				Borrowing transactions¹
	Loans		Collections		Borrowings		Repayments		Equity contributions in cash and others
Subsidiaries
KT M&S Co., Ltd.	W	29,400		32,025		—		—		—
KT Estate Inc.		—		—		—		12,638		—
Others		—		—		1,996		248		—
Associates and joint ventures
IBK-KT Young Entrepreneurs MARS Investment Fund		—		—		—		—		5,000
KT-IBKC Future Investment Fund 1		—		—		—		—		(1,820	)
TeamFresh Corp.²		—		—		—		—		52,841
Others Investment Association		—		—		—		158		(415	)

Total	W	29,400		32,025		1,996		13,044		55,606

¹	Lease transactions are included in borrowing transactions.

²	The transaction involved acquiring redeemable convertible preference shares of TeamFresh Corp. and occurred in the process of exchange with the shares of Lolab Co., Ltd. that were held.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	2023
	Loan transactions				Borrowing transactions¹
	Loans		Collections		Borrowings		Repayments		Equity contributions in cash and others
Subsidiaries
KT M&S Co., Ltd.	W	29,400		32,025		—		—		—
KT Estate Inc.		—		—		29		12,728		—
KT HEALTHCARE VINA COMPANY LIMITED		—		—		—		—		13,001
Others²		784		—		—		413		(9,030	)
Associates and joint ventures
Telco Credit Bureau Co., Ltd.		—		—		—		—		6,500
KT-IBKC Future Investment Fund 1		—		—		—		—		(910	)
Others Investment Association		—		—		—		155		3,955

Total	W	30,184		32,025		29		13,296		13,516

¹	Lease transactions are included in borrowing transactions.

²	Transactions with KT Strategic Investment Fund No.2 before it was excluded from subsidiary are included.

(8)

As of June 30, 2024, the Company has entered into a credit card agreement with a limit of W16,554 million (December 31, 2023: W10,923 million) with BC Card Co., Ltd.

(9)

The Company has an obligation to invest in KIAMCO Data Center Development Real Estate General Private Placement Investment Blind Trusts, a related party, and others according to the agreement. As of June 30, 2024 the Company is planning to an additional investment of W54,135 million.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

28.

Fair Value

During the period ended June 30, 2024, there have been no significant changes in the business or economic environment that affect the fair value of the Company’s financial assets and liabilities.

(1)

Fair Value by Financial Instruments Category

Carrying amounts and fair values of the financial assets and financial liabilities by category as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024				December 31, 2023
	Carrying amount		Fair value		Carrying amount		Fair value
Financial assets
Cash and cash equivalents	W	1,722,516		¹		1,242,005		¹
Trade and other receivables
Financial assets measured at amortized cost		3,305,853		¹		3,444,788		¹
Financial assets at fair value through other comprehensive income		112,859		112,859		116,198		116,198
Other financial assets
Financial assets measured at amortized cost		80,465		¹		377,996		¹
Financial assets at fair value through profit or loss		510,156		510,156		441,321		441,321
Financial assets at fair value through other comprehensive income		1,736,334		1,736,334		1,437,684		1,437,684
Derivative financial assets for hedging purpose		319,903		319,903		156,774		156,774

Total	W	7,788,086				7,216,766

Financial liabilities
Trade and other payables	W	4,537,184		¹		4,659,037		¹
Borrowings		7,465,269		7,086,076		7,559,933		7,328,734
Other financial liabilities
Financial assets at fair value through profit or loss		1,403		1,403		1,403		1,403
Derivative financial liabilities for hedging purpose		895		895		23,076		23,076

Total	W	12,004,751				12,243,449

¹	Since the carrying amount represents a reasonable approximation of fair value, it has been excluded from the fair value disclosures.

²	Lease receivables are excluded from fair value disclosure in accordance with Korean IFRS 1107.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(2)

Fair Value Hierarchy

Assets measured at fair value or for which the fair value is disclosed are categorized within the fair value hierarchy, and the defined levels are as follows:

•

Level 1: The quoted (unadjusted) price in active markets for identical assets or liabilities that an entity can access at the measurement date.

•

Level 2: All inputs other than quoted prices included in Level 1 that are observable (either directly that is, or indirectly that is, derived from prices) for the asset or liability.

•

Level 3: The unobservable inputs for the asset or liability.

Fair value hierarchy classifications of the financial assets and financial liabilities that are measured or disclosed at fair value or its fair value is disclosed as of June 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	June 30, 2024
	Level 1		Level 2		Level 3		Total
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	W	—		112,859		—		112,859
Other financial assets
Financial assets at fair value through profit or loss		—		—		510,156		510,156
Financial assets at fair value through other comprehensive income		1,535,145		—		201,189		1,736,334
Derivative financial assets for hedging		—		319,903		—		319,903

Total	W	1,535,145		432,762		711,345		2,679,252

Liabilities
Borrowings	W	—		7,086,076		—		7,086,076
Other financial liabilities
Financial assets at fair value through profit or loss		—		—		1,403		1,403
Derivative financial liabilities for hedging		—		895		—		895

Total	W	—		7,086,971		1,403		7,088,374

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	W	—		116,198		—		116,198
Other financial assets
Financial assets at fair value through profit or loss		—		—		441,321		441,321
Financial assets at fair value through other comprehensive income		1,236,495		—		201,189		1,437,684
Derivative financial assets for hedging		—		156,774		—		156,774

Total	W	1,236,495		272,972		642,510		2,151,977

Liabilities
Borrowings	W	—		7,328,734		—		7,328,734
Other financial liabilities
Financial assets at fair value through profit or loss		—		—		1,403		1,403
Derivative financial liabilities for hedging		—		23,077		—		23,077

Total	W	—		7,351,811		1,403		7,353,214

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(3)

Transfers between Fair Value Hierarchy Levels of Recurring Fair Value Measurements

Details of transfers between Level 1 and Level 2 of the fair value hierarchy for recurring fair value measurements.

There are no transfers between Level 1 and Level 2 of the fair value hierarchy for the recurring fair value measurements.

Details of changes in Level 3 of the fair value hierarchy for the recurring fair value measurements.

Details of changes in Level 3 of the fair value hierarchy for recurring fair value measurements for the six-month periods ended June 30, 2024 and 2023 are as follows:


(In millions of Korean won)	2024
	Financial assets					Financial liabilities
	Financial assets at FVTPL			Financial assets at FVOCI		Financial liabilities at FVTPL
Beginning balance	W	441,321			201,189		1,403
Acquisition		10,615			—		—
Transfer		50,341			—		—
Disposal		(2,455	)		—		—
Amount recognized in profit or loss		10,334			—		—

Ending balance	W	510,156			201,189		1,403


(In millions of Korean won)	2023
	Financial assets						Financial liabilities
	Financial assets at FVTPL			Financial assets at FVOCI			Financial liabilities at FVTPL
Beginning balance	W	410,388			198,453			5,164
Acquisition		2,195			—			—
Transfer		—			1,287			—
Disposal		(1,172	)		(6	)		—
Amount recognized in profit or loss		(20,643	)		—			4,274

Ending balance	W	390,768			199,734			9,438

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(4)	Valuation Techniques and Inputs

Valuation methods used in recurring fair value measurements categorized within Level 2 and Level 3 of the fair value hierarchy as of June 30, 2024 and December 31, 2023, are as follows:

(In millions of Korean won)

June 30, 2024

Fair value

Level

Valuation techniques

Assets

Trade and other receivables

Financial assets at fair value through other comprehensive income

112,859

DCF Model

Other financial assets

Financial assets at fair value through profit or loss

510,156

DCF Model,

Adjusted Net Asset Model,

Binomial Option Pricing Model,
Monte Carlo Simulation

Financial assets at fair value through other comprehensive income

201,189

Market Approach Model

Derivative financial assets for hedging

319,903

DCF Model

Liabilities

Borrowings

7,086,076

DCF Model

Other financial liabilities

Financial assets at fair value through profit or loss

1,403

Binomial Option Pricing Model

Derivative financial liabilities for hedging

895

DCF Model

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

(In millions of Korean won)

December 31, 2023

Fair value

Level

Valuation techniques

Assets

Trade and other receivables

Financial assets at fair value through other comprehensive income

116,198

DCF Model

Other financial assets

Financial assets at fair value through profit or loss

441,321

DCF Model,

Adjusted Net Asset Model,

Binomial Option Pricing Model,
Monte Carlo Simulation

Financial assets at fair value through other comprehensive income

201,189

Market Approach Model

Derivative financial assets for hedging

156,774

DCF Model

Liabilities

Borrowings

7,328,734

DCF Model

Other financial liabilities

Financial assets at fair value through profit or loss

1,403

Binomial Option Pricing Model

Derivative financial liabilities for hedging

23,077

DCF Model

(5)

Valuation Processes for Fair Value Measurements Categorized Within Level 3

The Company engages external experts that perform the fair value measurements required for financial reporting purposes. External experts report directly to the chief financial officer (CFO), and discusses valuation processes and results with the CFO in line with the Company’s closing dates.

KT Corporation

Notes to the Separate Interim Financial Statements

As of June 30, 2024 and 2023, and December 31, 2023

29.

Events After the Reporting Period

The Company has decided on a quarterly dividend at the Board of Directors dated July 16, 2024, and the details are as follows.


Type		Details
Dividend per share		W500 (Total dividend: W122,913 million)

Dividend yield		1.4%

Dividend report date		June 30, 2024

Dividend pay date		July 30, 2024

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