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

Name	Symbol	Market	Type
KT Corp	NYSE:KT	NYSE	Depository Receipt

	Price Change	% Change	Price	High Price	Low Price	Open Price	Traded	Last Trade
	0.00	0.00%	18.29				0	00:00:00

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 November 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: November 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

September 30, 2024 and 2023, and December 31, 2023

ATTACHMENT: INDEPENDENT AUDITOR’S REVIEW REPORT

KT Corporation and Its Subsidiaries

Index

September 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		11-77

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 November 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 September 30, 2024, and the related consolidated interim statements of profit or loss and comprehensive income for the three-month and nine-month periods ended September 30, 2024 and 2023, and changes in equity and cash flows for the nine-month periods ended September 30, 2024 and 2023, all expressed in Korean won, and a summary of material accounting policy information 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 September 30, 2024, and its financial performance and its cash flows for the nine-month periods ended September 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

November 14, 2024

Notice to Readers

This review report is effective as of November 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 September 30, 2024 and December 31, 2023


(In millions of Korean won)	Notes		September 30, 2024		December 31, 2023
Assets
Current Assets
Cash and cash equivalents		4,29	W	3,953,893	W	2,879,554
Trade and other receivables, net		4,5,29		6,950,875		7,170,289
Other financial assets		4,6,29		1,077,715		1,440,200
Current tax assets				2,868		3,299
Inventories, net		7		903,176		912,262
Other current assets		8		2,308,442		2,112,553

Total Current Assets				15,196,969		14,518,157

Non-Current Assets
Trade and other receivables, net		4,5,29		1,337,855		1,404,168
Other financial assets		4,6,29		2,870,766		2,724,761
Property and equipment, net		9		14,509,150		14,872,079
Right-of-use assets		16		1,267,216		1,304,963
Investment properties, net		9		2,267,526		2,198,135
Intangible assets, net		9		2,184,935		2,533,861
Investments in associates and joint ventures		10		1,579,025		1,556,889
Deferred tax assets				645,845		608,924
Net defined benefit assets		14		70,511		160,748
Other non-current assets		8		820,590		827,297

Total Non-Current Assets				27,553,419		28,191,825

Total Assets			W	42,750,388	W	42,709,982

(Continued)

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

KT Corporation and Its Subsidiaries

Consolidated Interim Statements of Financial Position

As of September 30, 2024 and December 31, 2023


(In millions of Korean won)	Notes	September 30, 2024			December 31, 2023
Liabilities
Current Liabilities
Trade and other payables	4,11,29	W	7,712,912		W	8,054,922
Borrowings	4,12,29		4,358,704			3,058,564
Other financial liabilities	4,6,29		325,125			322,099
Current tax liabilities			308,132			236,463
Other provisions	13,15		105,044			115,209
Deferred income	19		64,396			51,537
Other current liabilities	4,8,16		1,770,173			1,308,615

Total Current Liabilities			14,644,486			13,147,409

Non-Current Liabilities
Trade and other payables	4,11,29		573,395			819,558
Borrowings	4,12,29		5,409,920			7,159,601
Other financial liabilities	4,6,29		720,147			753,739
Net defined benefit liabilities	14		83,152			63,616
Other provisions	13,15		117,312			107,014
Deferred income	19		144,460			153,563
Deferred tax liabilities			1,065,567			994,330
Other non-current liabilities	4,8,16		805,546			950,015

Total Non-Current Liabilities			8,919,499			11,001,436

Total Liabilities			23,563,985			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		14,675,161			14,494,430
Accumulated other comprehensive income			259,339			52,407
Other components of equity	18		(634,995	)		(802,418	)

			17,304,262			16,749,176
Non-Controlling Interest			1,882,141			1,811,961

Total Equity			19,186,403			18,561,137

Total Liabilities and Equity		W	42,750,388		W	42,709,982

(Concluded)

The above interim consolidated 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 nine-month periods ended September 30, 2024 and 2023


		Three-Month and Nine-Month Periods Ended September 30
(In millions of Korean won, except per share amounts)	Notes	2024					2023
		Three-month			Nine-month		Three-month			Nine-month
Operating Revenue	19,27	W	6,654,615		W	19,855,588	W	6,697,442		W	19,688,639
Operating Expenses	20		6,190,505			18,390,992		6,375,509			18,304,493

Operating Profit	27		464,110			1,464,596		321,933			1,384,146
Other income	21		89,476			269,773		91,824			223,755
Other expenses	21		40,416			158,815		59,085			193,721
Finance income	22		(53,679	)		414,953		165,436			464,796
Finance costs	22		(51,513	)		401,011		166,930			542,209
Share of net profits (losses) of associates and joint ventures	10		(1,937	)		5,268		(2,845	)		(698	)

Profit before Income Tax			509,067			1,594,764		350,333			1,336,069
Income tax expense	23		125,896			408,049		62,031			305,640

Profit for the Period		W	383,171		W	1,186,715	W	288,302		W	1,030,429

Profit for the Period Attributable to:
Owners of the Parent Company		W	357,341		W	1,125,896	W	264,289		W	955,436
Non-controlling interests			25,830			60,819		24,013			74,993
Earnings per share attributable to the equity holders of the Parent Company during the period (in Korean won):
Basic earnings per share	24	W	1,453		W	4,575	W	1,064		W	3,801
Diluted earnings per share	24		1,451			4,572		1,062			3,797

The above interim consolidated statements of financial position 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 nine-month periods ended September 30, 2024 and 2023


			Three-Month and Nine-Month Periods Ended September 30
(In millions of Korean won)	Notes		2024						2023
			Three-month			Nine-month			Three-month			Nine-month
Profit for the period			W	383,171		W	1,186,715		W	288,302		W	1,030,429

Other comprehensive income (loss)
Items that will not be reclassified to profit or loss:
Remeasurements of the net defined benefit liabilities		14		187			(461	)		4,776			3,480
Share of remeasurement of the net defined benefit liabilities of associates and joint ventures				292			(404	)		(116	)		116
Valuation gains on equity instruments at fair value through other comprehensive income		6		(63,914	)		166,887			979			115,018
Items that are or may be subsequently reclassified to profit or loss:
Valuation gains (losses) on cash flow hedges		6		(84,705	)		56,731			45,192			92,541
Other comprehensive income from cash flow hedges reclassified to profit or loss				104,363			(48,581	)		(46,362	)		(121,775	)
Share of other comprehensive income of associates and joint ventures				1,340			6,257			1,516			14,887
Exchange differences on translation of foreign operations				(14,994	)		31,412			2,422			23,823

Other comprehensive income (loss) for the period, net of tax				(57,431	)		211,841			8,407			128,090

Total comprehensive income for the period			W	325,740		W	1,398,556		W	296,709		W	1,158,519

Total comprehensive income for the period attributable to:
Owners of the Parent Company			W	310,546		W	1,322,361		W	270,072		W	1,065,744
Non-controlling interests				15,194			76,195			26,637			92,775

The above interim consolidated 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 nine-month periods ended September 30, 2024 and 2023


			Attributable to owners of the Parent 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				—		—		955,436			—			—			955,436			74,993			1,030,429
Remeasurements of net defined benefit liabilities		14		—		—		3,906			—			—			3,906			(426	)		3,480
Share of remeasurement of the net defined benefit liabilities of associates and joint ventures				—		—		107			—			—			107			9			116
Share of other comprehensive income of associates and joint ventures				—		—		—			11,166			—			11,166			3,721			14,887
Valuation gains (losses) on cash flow hedges		6		—		—		—			(29,560	)		—			(29,560	)		326			(29,234	)
Valuation gains on financial instruments at fair value through other comprehensive income				—		—		222			115,059			—			115,281			(263	)		115,018
Exchange differences on translation of foreign operations				—		—		—			9,408			—			9,408			14,415			23,823

Total comprehensive income for the period				—		—		959,671			106,073			—			1,065,744			92,775			1,158,519

Transactions with owners
Dividends paid by the Parent Company				—		—		(501,843	)		—			—			(501,843	)		—			(501,843	)
Dividends paid to non-controlling interest of subsidiaries				—		—		—			—			—			—			(24,965	)		(24,965	)
Change in Consolidation Scope				—		—		—			—			—			—			(79,134	)		(79,134	)
Change in ownership interests in subsidiaries				—		—		—			—			216,994			216,994			127,831			344,825
Appropriation of retained earnings related to loss on disposal of treasury stock				—		—		(44,422	)		—			44,422			—			—			—
Acquisition of treasury stock				—		—		—			—			(300,243	)		(300,243	)		—			(300,243	)
Disposal of treasury stock				—		—		—			—			4,463			4,463			—			4,463
Retirement of treasury stocks				—		—		(100,000	)		—			100,000			—			—			—
Recognition of obligation to purchase own equity instruments				—		—		—			—			(298,196	)		(298,196	)		—			(298,196	)
Others				—		—		—			—			928			928			2,613			3,541

Subtotal				—		—		(646,265	)		—			(231,632	)		(877,897	)		26,345			(851,552	)

Balance as at September 30, 2023			W	1,564,499	W	1,440,258	W	14,570,749		W	28,297		W	(803,784	)	W	16,800,019		W	1,921,671		W	18,721,690

KT Corporation and Its Subsidiaries

Consolidated Interim Statements of Changes in Equity

For the nine-month periods ended September 30, 2024 and 2023


			Attributable to owners of the Parent 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				—		—		1,125,896			—		—			1,125,896			60,819			1,186,715
Remeasurements of net defined benefit liabilities		14		—		—		798			—		—			798			(1,259	)		(461	)
Share of remeasurement of the net defined benefit liabilities of associates and joint ventures				—		—		(219	)		—		—			(219	)		(185	)		(404	)
Share of other comprehensive income of associates and joint ventures				—		—		—			5,406		—			5,406			851			6,257
Valuation gains (losses) on cash flow hedges		6		—		—		—			8,631		—			8,631			(481	)		8,150
Valuation gains on financial instruments at fair value through other comprehensive income				—		—		(11,046	)		177,511		—			166,465			422			166,887
Exchange differences on translation of foreign operations				—		—		—			15,384		—			15,384			16,028			31,412

Total comprehensive income for the period				—		—		1,115,429			206,932		—			1,322,361			76,195			1,398,556

Transactions with owners
Dividends paid by the Parent Company				—		—		(482,970	)		—		—			(482,970	)		—			(482,970	)
Interim dividends paid by the Parent Company				—		—		(245,772	)		—		—			(245,772	)		—			(245,772	)
Dividends paid to non-controlling interest of subsidiaries				—		—		—			—		—			—			(20,642	)		(20,642	)
Change in Consolidation Scope				—		—		—			—		—			—			(796	)		(796	)
Change in ownership interests in subsidiaries				—		—		—			—		(15,333	)		(15,333	)		13,032			(2,301	)
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				—		—		—			—		140			140			2,391			2,531

Subtotal				—		—		(934,698	)		—		167,423			(767,275	)		(6,015	)		(773,290	)

Balance as of September 30, 2024			W	1,564,499	W	1,440,258	W	14,675,161		W	259,339	W	(634,995	)	W	17,304,262		W	1,882,141		W	W19,186,403

(Concluded)

The above interim consolidated 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 nine-month periods ended September 30, 2024 and 2023


			Nine-Month Periods Ended September 30
(In millions of Korean won)	Notes		2024			2023
Cash flows from operating activities
Cash generated from operations		25	W	4,666,069		W	4,719,678
Interest paid				(318,999	)		(282,317	)
Interest received				288,572			258,928
Dividends received				64,036			50,167
Income tax paid				(299,624	)		(283,126	)

Net cash inflow from operating activities				4,400,054			4,463,330

Cash flows from investing activities
Collection of loans				25,761			35,255
Disposals of financial assets at fair value through profit or loss				102,893			72,126
Disposals of financial assets at amortized cost				1,342,264			1,147,618
Disposals of financial assets at fair value through other comprehensive income				34,300			306
Disposals of investments in associates and joint ventures				17,881			6,055
Disposals of property, equipment and investment properties				36,069			41,010
Disposals of intangible assets				6,306			4,204
Disposals of right-of-use assets				118			485
Disposals of derivatives				—			4,888
Increase in cash due to consolidation scope change				9,847			46,641
Loans granted				(25,122	)		(27,923	)
Acquisitions of financial assets at fair value through profit or loss				(145,665	)		(123,614	)
Acquisitions of financial assets at amortized cost				(656,222	)		(1,523,900	)
Acquisitions of financial assets at fair value through other comprehensive income				(1,000	)		(10,267	)
Acquisitions of investments in associates and joint ventures				(44,200	)		(79,079	)
Acquisitions of property and equipment and investment properties				(2,023,026	)		(2,543,408	)
Acquisitions of intangible assets				(393,359	)		(471,387	)
Acquisitions of right-of-use assets				(14,670	)		(759	)
Decrease in cash due to consolidation scope change				(10,310	)		(51,562	)

Net cash outflow from investing activities			W	(1,738,135	)	W	(3,473,311	)

KT Corporation and Its Subsidiaries

Consolidated Interim Statements of Cash Flows

For the nine-month periods ended September 30, 2024 and 2023


		Nine-Month Periods Ended September 30
(In millions of Korean won)	Notes	2024			2023
Cash flows from financing activities
Proceeds from borrowings		W	2,920,442		W	4,409,723
Cash inflow from derivatives contracts			1,118			48,183
Cash inflow from transactions with non-controlling shareholders			1,128			662,949
Cash inflow from other financing activities			800			2,411
Repayments of borrowings			(3,434,719	)		(4,326,709	)
Dividends paid			(749,384	)		(526,808	)
Cash outflow from derivatives contracts			(855	)		—
Decrease in finance lease liabilities			(266,463	)		(293,222	)
Decrease in other financial liabilities			—			(4	)
Acquisition of treasury stock			(27,100	)		(300,086	)
Cash outflow from transactions with non-controlling shareholders			(31,827	)		(7,702	)
Cash outflow from other financing activities			(531	)		—

Net cash outflow from financing activities			(1,587,391	)		(331,265	)

Effect of exchange rate change on cash and cash equivalents			(189	)		2,559

Net increase (decrease) in cash and cash equivalents			1,074,339			661,313
Cash and cash equivalents
Beginning of the period			2,879,554			2,449,062

End of the period		W	3,953,893		W	3,110,375

(Concluded)

The above consolidated 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 September 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 83 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 the Government-Investment Enterprises Management Basic Act 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 all government-owned shares in accordance with the Korean government’s privatization plan. As of September 30, 2024, the Korean government no longer owns any shares in the Controlling Company.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

1.2

Consolidated Subsidiaries

(1)

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


			Controlling Interest ¹(%)
Subsidiary	Type of business	Location	September 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		67.3	%		63.9	%	December
Smartro Co., Ltd.9	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 September 30, 2024 and 2023, and December 31, 2023


			Controlling Interest ¹(%)
Subsidiary	Type of business	Location	September 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 installc 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
Altimedia Corporation	Software development and delivery	Korea		100.0	%		100.0	%	December

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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


			Controlling Interest ¹(%)
Subsidiary	Type of business	Location	September 30, 2024			December 31, 2023			Closing month
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
K-Logis Hwaseong Inc ³	Residential building development and supply	Korea		44.2	%		—		December

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

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

³	Although the Controlling Company owns less than 50% of the interest in, Juice Inc. and K-Logis Hwaseong Inc., these entities are consolidated as the Controlling Company holds the majority of the voting rights based on an agreement with other investors.

⁴

Although the Controlling Company owns less than 50% of the 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 stock 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 September 30, 2024 and 2023, and December 31, 2023

(2)

Changes in Scope of Consolidation

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


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

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(3)

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


(In millions of Korean won)	September 30, 2024				Nine-month period ended September 30, 2024³
	Total assets		Total liabilities		Operating revenues		Profit (loss) for the period
KT Linkus Co., Ltd.	W	55,124		55,289		59,353		(1,088	)
KT Telecop Co., Ltd.		390,613		244,566		394,574		8,925
KT Alpha Co., Ltd.		434,823		175,419		313,705		17,013
KT Service Bukbu Co., Ltd.		53,445		52,530		167,224		(7,485	)
KT Service Nambu Co., Ltd.		61,218		55,790		211,795		(7,402	)
BC Card Co., Ltd. ¹		6,459,257		4,701,123		2,844,618		129,288
H&C Network		85,327		4,246		19,822		1,446
Nasmedia Co., Ltd. ¹		496,763		237,014		103,451		16,482
KTDS Co., Ltd. ¹		365,879		151,413		508,481		31,643
KT M&S Co., Ltd.		290,243		229,245		617,918		11,597
KT MOS Bukbu Co., Ltd.		56,593		32,621		74,685		1,653
KT MOS Nambu Co., Ltd.		57,896		34,393		75,525		2,676
KT Skylife Co., Ltd. ¹		1,165,191		433,820		765,940		1,484
KT Estate Inc. ¹		2,611,153		961,191		438,999		15,138
KT GDH Co., Ltd.		7,854		1,342		3,087		253
KT Sat Co., Ltd.		721,997		87,504		135,511		23,474
KT Sports Co., Ltd.		42,453		17,300		69,323		9,840
KT Music Contents Fund No.2		5,367		1,537		89		44
KT M Mobile Co., Ltd.		190,292		75,386		255,684		7,418
KT Investment Co., Ltd. ¹		82,098		54,327		6,816		1,554
KTCS Corporation ¹		408,482		210,043		842,040		3,178
KTIS Corporation		476,263		267,540		453,036		9,822
Next Connect PFV		1,241,239		930,821		—		(6,460	)
KT Japan Co., Ltd. ¹		1,947		3,019		2,310		254
KT America, Inc.		6,136		536		5,657		199
KT Rwanda Networks Ltd. ²		123,149		308,021		16,435		(12,427	)
AOS Ltd. ²		12,186		15,920		7,907		1,666
KT Hong Kong Telecommunications Co., Ltd.		8,725		1,898		14,241		591
KT Huimangjieum ¹		9,063		2,167		13,073		1,538

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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


(In millions of Korean won)	September 30, 2024				Nine-month period ended September 30, 2024³
	Total assets		Total liabilities		Operating revenues		Profit (loss) for the period
KT Engineering Co., Ltd.		116,267		61,650		184,986		(2,686	)
KT Studio Genie Co., Ltd. ¹		955,666		223,978		326,651		13
East Telecom LLC ¹		67,277		36,984		26,097		4,804
KT ES Pte. Ltd. ¹		137,514		56,425		69,998		(9,422	)
KTP SERVICES INC.		2,846		672		497		118
Altimedia Corporation ¹		42,400		9,913		25,592		(897	)
KT RUS LLC		387		—		—		(91	)
KT DX VIETNAM COMPANY LIMITED		1,481		112		284		(236	)
kt Cloud Co., Ltd. ¹		2,041,727		523,453		562,204		36,344
K-Realty Qualified Private Real Estate Investment Trust No. 1		79,372		50,774		3,182		(975	)
AQUA RETAIL VIETNAM COMPANY LIMITED		953		419		351		(620	)

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

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

Profit or loss of companies newly included in consolidated financial statements 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 September 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	December 31, 2023				Nine-month period ended September 30, 2023³
	Total assets		Total liabilities		Operating revenues		Profit (loss) for the period
KT Linkus Co., Ltd.	W	64,178		63,452		60,143		1,060
KT Telecop Co., Ltd.		375,596		235,947		395,222		5,562
KT Alpha Co., Ltd.		443,639		191,254		316,696		17,319
KT Service Bukbu Co., Ltd.		63,760		55,360		177,754		(1,610	)
KT Service Nambu Co., Ltd.		71,576		58,745		216,749		(159	)
BC Card Co., Ltd. ¹		6,352,878		4,722,432		2,998,090		69,600
H&C Network		81,107		4,863		20,452		1,362
Nasmedia Co., Ltd. ¹		513,311		262,336		107,293		14,302
KTDS Co., Ltd. ¹		393,667		202,067		520,980		31,755
KT M&S Co., Ltd.		258,477		209,075		493,204		6,105
KT MOS Bukbu Co., Ltd.		50,750		28,431		72,475		8,287
KT MOS Nambu Co., Ltd.		46,839		26,012		72,546		5,880
KT Skylife Co., Ltd. ¹		1,220,842		479,369		776,568		26,562
KT Estate Inc. ¹		2,664,880		1,021,741		400,497		18,409
KT GDH Co., Ltd.		7,760		1,501		3,301		476
KT Sat Co., Ltd.		699,607		88,524		131,260		22,543
KT Sports Co., Ltd.		26,615		11,299		50,702		(3,844	)
KT Music Contents Fund No.2		5,558		1,772		431		216
KT M Mobile Co., Ltd.		176,838		69,317		221,673		7,357
KT Investment Co., Ltd. ¹		83,638		57,420		22,843		3,673
KTCS Corporation ¹		434,900		234,850		740,431		14,470
KTIS Corporation		447,609		243,519		432,692		11,685
Next Connect PFV		946,687		629,809		—		(25,389	)
KT Japan Co., Ltd. ¹		2,015		3,341		2,159		147
KT America, Inc.		6,013		701		6,716		115
KT Rwanda Networks Ltd. ²		134,847		313,787		21,862		(43,490	)
AOS Ltd. ²		10,763		1,983		6,120		991
KT Hong Kong Telecommunications Co., Ltd.		11,142		5,121		14,400		211
KT Huimangjieum ¹		8,073		2,715		12,369		1,762
KT Engineering Co., Ltd.		160,243		104,005		129,832		(6,815	)
KT Studio Genie Co., Ltd. ¹		989,187		259,413		385,181		20,998

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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


(In millions of Korean won)	December 31, 2023				Nine-month period ended September 30, 2023³
	Total assets		Total liabilities		Operating revenues		Profit (loss) for the period
Lolab Co., Ltd.		42,744		37,838		125,882		(9,971	)
East Telecom LLC ¹		48,483		22,632		22,141		5,649
KT ES Pte. Ltd.¹		117,009		90,392		64,948		(5,302	)
KTP SERVICES INC.		2,967		919		283		(73	)
Altimedia Corporation ¹		48,381		12,374		34,008		5,336
KT RUS LLC		501		10		—		(303	)
KT DX VIETNAM COMPANY LIMITED		1,694		102		53		(130	)
kt cloud Co., Ltd. ¹		1,983,972		503,241		496,189		27,426
KT HEALTHCARE VINA COMPANY LIMITED		12,730		439		—		(432	)
K-Realty Qualified Private Real Estate Investment Trust No. 1		80,266		50,693		3,486		(846	)
AQUA RETAIL VIETNAM COMPANY LIMITED		1,202		62		—		(65	)

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

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

Profit or loss of companies newly included in consolidated financial statements 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 September 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, reformatted, and translated into English from the original Korean language financial statements.

The consolidated interim financial statements of the Group for the nine-month period ended September 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 Changes in Accounting Policy and Disclosures

(1)

New and amended standards and interpretations adopted by the Group

The Group has applied the following standards and interpretations for the first time for their annual reporting period commencing 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 or non-current is based on rights that are in existence 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 September 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 has to 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 Statement of Cash Flows and K-IFRS 1107 Financial Instruments: Disclosures (Amendment) - Supplier Finance Arrangements

The amendments add a disclosure objective to K-IFRS 1007 Cash Flow Statement stating that an entity is required to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows. In addition, K-IFRS 1107 was 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 arrangements’ 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 arrangements

•

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 September 30, 2024 and 2023, and December 31, 2023

•

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

The amendments to K-IFRS 1116 add a subsequent measurement requirement for sale and leaseback transactions that satisfy the requirements in K-IFRS 1115 to be accounted for as a sale. The amendments require the seller-lessee to determine ‘lease payments’ or ‘revised lease payments’ such that the seller-lessee does not recognise a gain or loss that relates to the right of use retained by the seller-lessee, after the commencement date.

•

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

The amendments to K-IFRS 1001 add additional disclosure requirements required by other standards for transactions related to virtual assets, setting out the disclosure requirements for 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 about virtual assets, the accounting policy applied and each virtual asset’s acquisition method, cost, and the fair value at the end of the reporting period is required. Also, when issuing a virtual asset, the entity’s obligations and 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 number of virtual assets held after issuance, and important contract details shall 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 Effects of Changes in Foreign Exchange Rates and K-IFRS 1101 First - Time Adoption of Korean International Financial Reporting Standards (Amendment) - Lack of Exchangeability

The amendments define situations in which exchange with other currencies is possible for accounting purposes and clarify the assessment of the exchangeability between two currencies, the estimation of spot exchange rates when exchangeability is lacking and the disclosure requirements

If exchange with another currency is not possible, the spot exchange rate must be estimated at the measurement date, and observable exchange rates without adjustments or other estimation techniques should be used.

These amendments are effective for annual reporting periods beginning on or after January 1, 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 September 30, 2024 and 2023, and December 31, 2023

2.3

Accounting Policies

The material accounting policies and methods 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 resulting from the application of amendments and enactments of standards described in Note 2.2 (1) and as detailed 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 Group to make estimates and assumptions about the future. Management also needs to exercise judgment in applying the Group’s accounting policies. Estimates and assumptions are evaluated continuously and are based on historical experience and other factors, including reasonable expectations of future events under the given circumstances. As the resulting accounting estimates will, by definition, rarely equal the actual results, they involve a significant risk of resulting in material adjustments.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

4.	Financial Instruments by Category

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


(In millions of Korean won)	September 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	3,953,893		—		—		—		3,953,893
Trade and other receivables		8,028,205		—		260,525		—		8,288,730
Other financial assets		717,457		1,117,997		1,901,045		211,982		3,948,481

(In millions of Korean won)	September 30, 2024
Financial liabilities	Financial liabilities at amortized cost		Financial liabilities at FVTPL		Derivatives used for hedging		Others		Total
Trade and other payables¹	W	7,698,943		—		—		—		7,698,943
Borrowings		9,768,624		—		—		—		9,768,624
Other financial liabilities		917,958		125,008		2,306		—		1,045,272
Lease liabilities		—		—		—		1,101,710		1,101,710
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	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

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

5.	Trade and Other Receivables

(1)

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

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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


(In millions of Korean won)	September 30, 2024
	Total amounts		Provision for impairment			Present value discount			Carrying amount
Current assets
Trade receivables	W	3,690,899		(374,962	)		(8,463	)		3,307,474
Other receivables		3,745,004		(99,629	)		(1,974	)		3,643,401

Total		7,435,903		(474,591	)		(10,437	)		6,950,875

Non-current assets
Trade receivables		220,938		(1,299	)		(13,373	)		206,266
Other receivables		1,239,606		(95,230	)		(12,787	)		1,131,589

Total	W	1,460,544		(96,529	)		(26,160	)		1,337,855


(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 September 30, 2024 and 2023, and December 31, 2023

(2)

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


(In millions of Korean won)	September 30, 2024			December 31, 2023
Loans	W	48,075			51,854
Receivables ¹		3,322,769			3,539,742
Accrued income		48,552			43,920
Refundable deposits		266,147			299,935
Loans receivable		1,084,165			1,067,005
Finance lease receivables		145,309			141,883
Others		54,832			58,357
Less: Provision for impairment		(194,859	)		(183,636	)

Total	W	4,774,990			5,019,060

¹	As of September 30, 2024, credit sales asset of W 2,456,904 million (December 31, 2023: W 2,696,505 million) held by BC Card Co., Ltd. are included.

(3)

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

(4)

The Group classifies a certain portion of trade receivables as financial assets at fair value through other comprehensive income, 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 September 30, 2024 and 2023, and December 31, 2023

6.	Other Financial Assets and Liabilities

(1)

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


(In millions of Korean won)	September 30, 2024			December 31, 2023
Other financial assets
Financial assets at amortized cost ¹	W	717,457			1,385,921
Financial assets at fair value through profis or loss ^1,2		1,117,997			939,661
Financial assets at fair value through other comprehensive income		1,901,045			1,680,168
Derivatives used for hedging		211,982			159,211
Less: Non-current		(2,870,766	)		(2,724,761	)

Current	W	1,077,715			1,440,200

Other financial liabilities
Financial liabilities at amortized cost ^3,4	W	917,958			915,185
Financial liabilities at FVTPL		125,008			136,106
Derivatives used for hedging		2,306			24,547
Less: Non-current		(720,147	)		(753,739	)

Current	W	325,125			322,099

As of September 30, 2024, the Group’s financial instruments amount to W 115,350 million (December 31, 2023: W 98,309 million) and consist of checking account deposits, time deposits, and others which are subject to withdrawal restrictions.

As of September 30, 2024, the Group provided investments in Korea Software Financial Cooperative and others amounting to W 10,477 million (December 31, 2023: W 9,016 million) as a collateral in exchange for the payment guarantee provided by the Korea Software Financial Cooperative and others.

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 September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024			December 31, 2023
Equity instruments (Listed)	W	8,129			13,911
Equity instruments (Unlisted)		42,223			42,185
Debt instruments		1,067,645			880,549
Derivatives held for trading ¹		—			3,016

Total		1,117,997			939,661
Less: Non-current		(854,171	)		(782,143	)

Current	W	263,826			157,518

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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 September 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 September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024			December 31, 2023
Equity instruments (Listed)	W	1,450,521			1,231,188
Equity instruments (Unlisted)		444,407			443,067
Debt instruments		6,117			5,913

Total		1,901,045			1,680,168
Less: Non-current		(1,901,045	)		(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 September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024					December 31, 2023
	Assets			Liabilities		Assets			Liabilities
Interest rate swap ¹	W	631			60		1,530			191
Currency swap ²		211,351			2,246		157,681			24,356

Total		211,982			2,306		159,211			24,547
Less: Non-current		(110,435	)		—		(107,802	)		(23,696	)

Current	W	101,547			2,306		51,409			851

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.

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 exceeds 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 September 30, 2024 and 2023, and December 31, 2023

Details of valuation gains and losses on the derivative instruments for the nine-month periods ended September 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	62		—		(785	)		—		—		736
Currency swap		65,857		2,677		11,731			157,120		204		(39,882	)

Total	W	65,919		2,677		10,946			157,120		204		(39,146	)

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 amounts to valuation gain of W 1,608 million for the nine-month periods ended September 30, 2024 (For the Nine-month periods ended September 30, 2023: valuation gain of W 1,373 million).

(5)

Financial Liabilities at fair value through profit or loss

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


(In millions of Korean won)	September 30, 2024		December 31, 2023
Derivatives held for trading ^1,2	W	125,008		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 nine-month period ended September 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).

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 September 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 nine-month periods ended September 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

11,098

—

9,507

7.	Inventories

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


(In millions of Korean won)
	September 30, 2024							December 31, 2023
	Acquisition cost		Valuation allowance			Carrying amount		Acquisition cost		Valuation allowance			Carrying amount
Merchandise	W	953,512		(80,174	)		873,338		981,127		(102,215	)		878,912
Others		29,838		—			29,838		33,350		—			33,350

Total	W	983,350		(80,174	)		903,176		1,014,477		(102,215	)		912,262

Cost of inventories recognized as expenses for the nine-month period ended September 30, 2024 amounts to W 2,628,976 million (For the nine-month periods ended September 30, 2023: W 2,451,208 million) and reversal valuation loss on inventory amounts to W 22,041 million for the nine-month period ended September 30, 2024 (For the nine-month periods ended September 30, 2023: W 3,972 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

8.	Other Assets and Liabilities

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


(In millions of Korean won)	September 30, 2024			December 31, 2023
Other assets
Advance payments	W	250,873			217,997
Prepaid expenses		284,669			146,628
Contract cost		1,721,866			1,727,468
Contract assets		850,870			832,520
Others		20,754			15,237
Less: Non-current		(820,590	)		(827,297	)

Current	W	2,308,442			2,112,553

Other liabilities
Advances received ¹	W	996,618			582,652
Withholdings		142,302			159,080
Unearned revenue ¹		28,369			27,392
Lease liabilities		1,101,710			1,179,909
Contract liabilities		279,338			278,749
Others		27,382			30,848
Less: Non-current		(805,546	)		(950,015	)

Current	W	1,770,173			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 September 30, 2024 and 2023, and December 31, 2023

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

(1)

Changes in property and equipment for nine-month period ended September 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		1,862,339			2,184,266
Disposal and termination		(51,418	)		(59,157	)
Depreciation		(2,107,814	)		(2,025,561	)
Transfer to investment properties		1,052			(108,181	)
Changes in consolidation scope		(1,326	)		6,761
Impairment		—			(522	)
Others		(65,762	)		(99,838	)

Ending, net	W	14,509,150			14,669,947

(2)

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


(In millions of Korean won)	2024			2023
Beginning, net	W	2,198,135			1,933,358
Acquisition and capital expenditure		112,709			136,291
Disposal		(1,772	)		(4,228	)
Depreciation		(39,286	)		(42,862	)
Transfer to investment properties		(1,052	)		108,181
Others		(1,208	)		(1,180	)

Ending, net	W	2,267,526			2,129,560

(3)

As of September 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 105,700 million for one year or less, W 130,193 million for more than one year and less than five years, W 13,191 million for over five years, and W 249,084 million in total.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(4)

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

(In millions of Korean won)

September 30, 2024

Collateral

Carrying
amount

Secured
amount

Related
account

Related
amount

Secured party

Land and buildings

80,003

75,468

Borrowings

62,890

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

Land and Buildings

558,565

67,845

Deposits

57,881

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

(5)

Changes in intangible assets for the nine-month period ended September 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		147,984			254,950
Disposal and termination		(14,266	)		(9,235	)
Amortization		(494,165	)		(477,388	)
Impairment		(857	)		(695	)
Changes in consolidation scope		(9,370	)		6,094
Others		21,748			29,208

Ending, net	W	2,184,935			2,932,767

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 W 205,550 million as of September 30, 2024 (December 31, 2023: W 212,910 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(6)

Goodwill is allocated to the Group’s cash-generating units, which are identified by operating segments. As of September 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.		46,740
KT MOS Bukbu Co., Ltd. and others		45,935

Total	W	488,079

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 September 30, 2024 and 2023, and December 31, 2023

10.

Investments in Associates and Joint Ventures

(1)

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


	Percentage of ownership (%)						Location		Closing month
	September 30, 2024			December 31, 2023
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

¹	Although the Group holds less than 20% interest in ordinary shares as of September 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 nine-month period ended September 30, 2024 and 2023, are as follows:


	2024
(In millions of Korean won)	Beginning		Acquisition (Disposal)			Share of net profit (loss) from associates and joint ventures ¹			Others			Ending
KIF Investment Fund	W	177,054		—			617			983			178,654
K Bank Inc.		872,881		—			40,088			3,456			916,425
HD Hyundai Robotics Co., Ltd.		47,734		—			574			(685	)		47,623
Megazone Cloud Corporation		131,694		—			(2,236	)		1,365			130,823
IGIS No. 468-1 General Private Real Estate Investment Company		23,484		—			(56	)		—			23,428
KT-DSC Creative Economy Youth Start-up Investment Fund		25,117		(275	)		(6,726	)		(845	)		17,271
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		11,942		—			(1,734	)		—			10,208
LS Marine Solution Co., Ltd.		23,492		(19,656	)		237			(4,073	)		—
Others¹		243,491		40,441			(28,375	)		(964	)		254,593

Total	W	1,556,889		20,510			2,389			(763	)		1,579,025

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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


	2023
(In millions of Korean won)	Beginning		Acquisition (Disposal)			Share of net profit (loss) from associates and joint ventures ¹			Others			Ending
KIF Investment Fund	W	170,979		—			1,174			300			172,453
K Bank Inc.		852,756		—			10,768			12,386			875,910
HD Hyundai Robotics Co., Ltd.		49,372		—			167			(110	)		49,429
Megazone Cloud Corporation		136,199		—			(5,117	)		2,322			133,404
IGIS No. 468-1 General Private Real Estate Investment Company		23,589		—			(57	)		—			23,532
KT-DSC Creative Economy Youth Start-up Investment Fund		22,123		(500	)		1,514			—			23,137
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		16,620		—			(765	)		—			15,855
LS Marine Solution Co., Ltd.		—		—			126			23,256			23,382
Others¹		209,084		75,396			(8,636	)		(8,244	)		267,600

Total	W	1,480,722		74,896			(826	)		29,910			1,584,702

KT Investment Co., Ltd., a subsidiary of the Group, recognized net profit (loss) in the investments in associates as operating income. Net loss recognized as operating income for the nine-months period ended September 30, 2024 amount to W 216 million (nine-month period ended September 30, 2023: net loss of W 128 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(3)

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


(In millions of Korean won)	September 30, 2024
	Assets		Liabilities		Operating revenue		Profit (loss) for the period
KIF Investment Fund	W	535,962		—		12,407		1,850
K Bank Inc.		24,511,648		22,513,963		875,824		122,419
HD Hyundai Robotics Co., Ltd.		369,562		100,790		166,702		3,872
Megazone Cloud Corporation		1,156,606		570,143		1,226,033		(12,575	)
IGIS No. 468-1 General Private Real Estate Investment Company		52,485		6		4		(126	)
KT-DSC Creative Economy Youth Start-up Investment Fund		60,852		404		3,994		(21,230	)
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		169,459		126,782		—		(333	)


(In millions of Korean won)	December 31, 2023				September 30, 2023
	Assets		Liabilities		Operating revenue		Profit (loss) for the period
KIF Investment Fund	W	531,163		—		14,122		3,523
K Bank Inc		21,410,602		19,545,592		688,142		23,614
HD Hyundai Robotics Co., Ltd.		386,292		116,332		121,299		629
Megazone Cloud Corporation		1,142,383		546,766		1,041,121		(16,826	)
IGIS No. 468-1 General Private Real Estate Investment Company		52,616		11		4		(128	)
KT-DSC Creative Economy Youth Start-up Investment Fund		88,010		101		10,659		5,299
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		151,459		107,553		—		(296	)

(4)

Due to discontinuance of equity method of accounting, the Group has not recognized loss from associates and joint ventures of W 1,053 million for the nine-month period September 30, 2024 (nine-month period ended September 30, 2023: W 703 million). The unrecognized accumulated comprehensive loss of associates and joint ventures as of September 30, 2024 is W 7,234 million (December 31, 2023: W 10,748 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

11.

Trade and Other Payables

(1)

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


(In millions of Korean won)	September 30, 2024		December 31, 2023
Current liabilities
Trade payables	W	1,210,643		1,297,752
Other payables		6,502,269		6,757,170

Total	W	7,712,912		8,054,922

Non-current liabilities
Trade payables		1,792		3,202
Other payables	W	571,603		816,356

Total	W	573,395		819,558

(2)

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


(In millions of Korean won)	September 30, 2024			December 31, 2023
Non-trade payables ¹	W	4,376,528			5,207,165
Accrued expenses		1,531,408			1,267,700
Operating deposits		944,760			880,810
Others		221,176			217,851
Less: non-current		(571,603	)		(816,356	)

Current	W	6,502,269			6,757,170

¹	As of September 30, 2024, credit sale liabilities amounting to W 2,075,633 million (December 31, 2023: W 2,314,077 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 September 30, 2024 and 2023, and December 31, 2023

12.

Borrowings

(1)

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

Debentures


(In millions of Korean won and foreign currencies in thousands)			September 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	131,960		USD 100,000	W	128,940
MTNP notes	Jul. 18, 2026	2.500%		USD 400,000		527,840		USD 400,000		515,760
MTNP notes	Jul. 19, 2024	—		—		—		JPY 400,000		3,651
MTNP notes	Sep. 01, 2025	1.000%		USD 400,000		527,840		USD 400,000		515,760
FR notes ²	Nov. 01, 2024	Compounded SOFR+1.210%		USD 350,000		461,860		USD 350,000		451,290
MTNP notes	Jan. 21, 2027	1.375%		USD 300,000		395,880		USD 300,000		386,820
MTNP notes	Aug. 08, 2025	4.000%		USD 500,000		659,800		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	—		—		—		—		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
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

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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


(In millions of Korean won and foreign currencies in thousands)			September 30, 2024				December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won
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	—		—		—		—		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	—		—		—		—		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
The 155-2nd Won-denominated unsecured bond	Sep. 02, 2024	—		—		—		—		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

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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


(In millions of Korean won and foreign currencies in thousands)			September 30, 2024				December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won
The 159-1st Won-denominated unsecured bond	Aug. 09, 2024	—		—		—		—		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
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

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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


(In millions of Korean won and foreign currencies in thousands)			September 30, 2024				December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won
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		—		—
The 168-3rd Won-denominated unsecured bond	Oct. 02, 2025	3.724%		—		40,000		—		—
The 169th Won-denominated unsecured bond	Apr. 4, 2025	3.671%		—		50,000		—		—
The 170th Won-denominated unsecured bond	Jun. 12, 2026	3.688%		—		50,000		—		—
The 171-1st Won-denominated unsecured bond	Jun. 11, 2027	3.330%		—		20,000		—		—
The 171-2nd Won-denominated unsecured bond	Aug. 12, 2027	3.329%		—		60,000		—		—

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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


(In millions of Korean won and foreign currencies in thousands)			September 30, 2024					December 31, 2023
Type	Maturity	Annual interest rates	Foreign currency		Korean won			Foreign currency		Korean won
The 172-1st Won-denominated unsecured bond	Mar. 6, 2026	3.514%		—		10,000			—		—
The 172-2nd Won-denominated unsecured bond	Mar. 9, 2026	3.514%		—		40,000			—		—
The 172-3rd Won-denominated unsecured bond	Sep. 9, 2026	3.474%		—		30,000			—		—
The 173-1st Won-denominated unsecured bond	Sep. 23, 2027	3.291%		—		60,000			—		—
The 173-2nd Won-denominated unsecured bond	Sep. 24, 2027	3.291%		—		50,000			—		—
The 173-3rd Won-denominated unsecured bond	Oct. 22, 2027	3.292%		—		40,000			—		—

Subtotal						8,385,180					8,446,921
Less: Current portion						(3,489,637	)				(1,924,523	)
Discount on bonds						(16,198	)				(19,248	)

Total					W	4,879,345				W	6,503,150

As of September 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 was terminated in 2007.

²	The Daily SOFR is approximately 4.960% as of September 30, 2024.

³	The CMS (5Y) and CMS (10Y) is approximately 2.773% and 2.820%, respectively as of September 30, 2024.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

2)	Convertible bonds


(In millions of Korean won)
Type	Issuance Date		Maturity		Annual interest Rate		September 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								(905	)		(1,811	)

Subtotal								9,362			8,456
Less: Current portion								(9,362	)		(8,456	)

Total							W	—			—

¹	Common shares of Storywiz are subject to conversion (appraisal period: September 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)
Type	Financial institution	Annual interest rates	September 30, 2024				December 31, 2023
			Foreign currency		Korean won		Foreign currency		Korean won
Operational
	Shinhan Bank ¹	Financial Bond (6M) +2.850% ~ Financial Bond (6M)+ 2.860%		—		8,990		—		—
		4.300%		—		70,000		—		151,500
	Woori Bank	4.050%~5.440%		—		112,550		—		70,000
		—		—		—		—		20,000
	Korea Development Bank ¹	Industrial Financial Debenture (1Y) +2.640%		—		8,000		—		—
		4.680%~4.850%		—		23,700				34,900
	Industrial Bank of Korea ¹	4.460%		—		6,000		—		6,000
	Hana Bank	4.280%		—		28,000		—		—
		—		—		—		—		4,800
	KB SECURITIES	3.630%		—		120,000		—		69,635
	HSBC	—		—		—		USD 23,600		30,450
	NongHyup Bank¹	KORIBOR(1M)+1.230%		—		700		—		—
		—		—		—		—		8,500
	Korea Investment	—		—		—		—		30,000

Total					W	377,940			W	425,785

¹	As of September 30, 2024, the interest rates for the financial bond (6M), industrial finance bond (1Y), and KORIBOR (1M) were approximately 3.409%, 3.183%, and 3.490%, respectively.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

Long-term borrowings


(In millions of Korean won and thousands of foreign currencies)			September 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	987			—	W	1,480
CA-CIB	General loans	3.820%		—		100,000			—		200,000
JPM	General loans	2.700%		—		100,000			—		200,000
DBS	General loans	3.820%		—		100,000			—		100,000
Shinhan Bank	General loans	4.090%		—		100,000			—		—
	General loans²	Term SOFR(3M)+1.700%		USD 8,910		11,758			USD 8,910		11,489
	General loans	—		—		—			USD 31,472		40,655
	General loans ³	4.490%		—		62,398			—		62,398
	General loans ²	Term SOFR(3M)+1.600%		USD 21,127		27,879			USD 21,127		27,241
	General loans ²	Term SOFR(3M)+1.940%		USD 35,000		46,186			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		11,350			EUR 7,700		10,985
	General loans	5.290%		—		26,526			—		41,526
Hi Investment & Securities	CP	2.302%		—		94,734			—		92,994
Bookook Investment	CP	3.603%		—		9,931			—		19,525
Korea Investment	CP	3.622%		—		78,171			—		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		4,499			—		—
	loans⁴	10.300%		USD 5,400		6,922			—		—
NH Jayang	PF loans²	CD(91D)+1.150%		—		19,733			—		53,033
Kyobo Life Insurance	PF loans²	CD(91D)+1.150%~ CD(91D)+3.450%		—		54,615			—		84,586
Standard Chartered Bank Korea	PF loans²	CD(91D)+1.150%~ CD(91D)+3.450%		—		36,410			—		56,390
	General loans ²	CD(91D)+0.750%		—		32,000			—		32,000
Samsung Life Insurance	PF loans	1.860%~4.160%		—		30,341			—		46,992
Kookmin Bank	General loans	4.750%		—		8,000			—		—

Subtotal						1,012,340					1,356,251
Less: Current portion						(481,765	)				(699,800	)

Total					W	530,575				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 3.729%, 4.592%, 3.530% respectively, as of September 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 September 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 September 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
Oct.1, 2024 ~ Sep.30, 2025	W	1,853,000		1,649,500		3,502,500		762,535		97,170		859,705		4,362,205
Oct.1, 2025 ~ Sep.30, 2026		1,090,000		527,840		1,617,840		24,093		—		24,093		1,641,933
Oct.1, 2026 ~ Sep.30, 2027		730,000		395,880		1,125,880		437,332		3,808		441,140		1,567,020
Oct.1, 2027 ~ Sep.30, 2028		555,000		—		555,000		15,600		3,808		19,408		574,408
After Oct.1, 2028		1,460,000		131,960		1,591,960		42,126		3,808		45,934		1,637,894

Total	W	5,688,000		2,705,180		8,393,180		1,281,686		108,594		1,390,280		9,783,460

13.

Provisions

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


(In millions of Korean won)	2024
	Litigation			Restoration cost			Others			Total
Beginning balance	W	29,707			133,159			59,357			222,223
Increase (transfer)		(194	)		9,290			5,295			14,391
Usage		(3,389	)		(1,298	)		(4,901	)		(9,588	)
Reversal		(3,102	)		(627	)		(941	)		(4,670	)

Ending balance	W	23,022			140,524			58,810			222,356

Less: Current	W	(22,990	)		(23,376	)		(58,678	)		(105,044	)
Non-current		32			117,148			132			117,312


(In millions of Korean won)	2023
	Litigation			Restoration cost			Others			Total
Beginning balance	W	36,329			108,962			55,075			200,366
Increase (transfer)		42			15,992			5,716			21,750
Usage		(262	)		(879	)		(3,932	)		(5,073	)
Reversal		(2	)		(580	)		(49	)		(631	)
Changes in consolidation scope		—			—			(177	)		(177	)
Others		—			(445	)		445			—

Ending balance	W	36,107			123,050			57,078			216,235

Less: Current	W	(34,532	)		(19,764	)		(56,839	)		(111,135	)
Non-current		1,575			103,286			239			105,100

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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 September 30, 2024 and December 31, 2023, are determined as follows:


(In millions of Korean won)	September 30, 2024			December 31, 2023
Present value of defined benefit obligations	W	2,420,589			2,365,793
Fair value of plan assets		(2,407,948	)		(2,462,925	)

Liabilities	W	83,152			63,616

Assets	W	70,511			160,748

(2)

Changes in the defined benefit obligations for the nine-month period ended September 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		165,507			158,001
Interest expense		62,965			73,908
Benefit paid		(177,901	)		(163,901	)
Remeasurements on defined benefit obligations:		4,108			2,272
Changes in scope of consolidation		(422	)		(3,398	)
Others		539			(835	)

Ending	W	2,420,589			2,284,702

(3)

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


(In millions of Korean won)	2024			2023
Beginning	W	2,462,925			2,478,143
Interest income		68,715			86,098
Remeasurements on plan assets:		1,451			6,853
Employer contributions		7,136			8,689
Benefits paid		(168,724	)		(146,762	)
Changes in scope of consolidation		—			(3,766	)
Others		36,445			53,519

Ending	W	2,407,948			2,482,774

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(4)

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


(In millions of Korean won)	2024			2023
Current service cost	W	165,507			158,001
Net interest expense		(5,750	)		(12,190	)
Transfer out		(11,706	)		(9,669	)

Total expenses	W	148,051			136,142

15.

Commitments and Contingencies

(1)

As of September 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	W	374,000		—
Inter-Korean Cooperation Fund	Export-Import Bank of Korea		37,700		987
Economic Cooperation Business Insurance	Export-Import Bank of Korea		3,240		1,732
Collateralized loan on electronic accounts receivable-trade	Kookmin Bank and others		544,650		9,773
Plus electronic notes payable	Industrial Bank of Korea		50,000		495
Working capital loan	Korea Development Bank and others		1,570,990		279,140
	Shinhan Bank		USD 65,037		USD 65,037
	Woori Bank		EUR 7,700		EUR 7,700
Facility loans	Shinhan Bank and others		824,000		230,024
Derivatives transaction limit	Korea Development Bank and others		USD 1,970,000		USD 1,970,000

Total			KRW3,404,580		522,151
			USD 2,035,037		2,035,037
			EUR7,700		7,700

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(2)

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


(In millions of Korean won and foreign currencies in thousands)	Financial institution	Limit
Hana Bank	Guarantee for payment in Korean currency		4,000
	Comprehensive credit line and others		3,100
	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 Korean currency		710
	Guarantee for payment in foreign currency and others	USD	101,054
	Corporate card issuance guarantee	VND	222,914
Woori Bank	Guarantee for payment in Korean currency		5,100
	Guarantee for payment in foreign currency	USD	7,000
	Guarantee for payment in foreign currency	EUR	7,700
Korea Development Bank	Refund guarantee for advances received	USD	6,811
HSBC	Guarantees for depositions	USD	825
Seoul Guarantee Insurance Company	Performance guarantee and others		394,414
Korea Software Financial Cooperative	Performance guarantee and others		1,308,260
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		133,009

Total	KRW		2,584,258
	USD	USD	129,235
	EUR	EUR	7,700
	VND	VND	222,914

¹	Inventory assets (W 362,010 million) and investment properties (W 392,764 million) are provided as collateral with commitment respectively, as of September 30, 2024.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(3)

As of September 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

82,877

Aug. 5, 2022
~ Feb. 28, 2025

KT Engineering Co., Ltd.¹

Gasan Solar Power Plant Inc.

Shinhan Bank

4,700

112

Jan. 7, 2010

~ Jan. 8, 2025

Nasmedia Co., Ltd.

Stockholders Association Members

Korea Securities
Finance Corp

738

252

—

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 September 30, 2024, the Controlling Company and KT Sat Co., Ltd. are jointly and severally liable for reimbursement of W 509 million.

(5)

For the nine-month period ended September 30, 2024, the Group entered into agreements with the Securitization Specialty Companies (2024: First 5G 73^rd to 76^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 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 September 30, 2024, the Group is a defendant in 248 lawsuits with the total claimed amount of W 173,871 million (As of December 31, 2023: W 167,834 million). As of September 30, 2024, litigation provisions of W 23,022 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 September 30, 2024 (Note 13).

(7)

Under the agreement of bond issuance 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 September 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 September 30, 2024 and 2023, and December 31, 2023

(9)

As of September 30, 2024, the contract amount of properties and equipments acquisition agreement made but not yet recognized amounts to W 407,323 million (As of December 31, 2023: W 489,231 million).

(10)

As of September 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 this was exercised during the nine-month period ended September 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 September 30, 2024, remaining amounts of USD 33,700 thousand and JPY 240,000 thousand will be invested through the Capital Call method in the future.

(14)

The Group has the amount of W 201,615 million (40%) of joint responsibility obligation and W 302,423 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 W 438,312 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)

During the prior period, the Group entered into an agreement with equity investors who participated in the equity acquisition contract of kt Cloud Co., Ltd. According to this agreement, if conditions per the agreement are met, the financial investor may exercise a Tag-Along 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).

(17)

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

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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)	September 30, 2024		December 31, 2023
Right-of-use assets
Property and building	W	984,031		1,019,537
Machinery and communication line facilities		102,813		89,150
Others		180,372		196,276

Total	W	1,267,216		1,304,963


(In millions of Korean won)	September 30, 2024		December 31, 2023
Lease liabilities¹
Current	W	364,686		307,868
Non-current		737,024		872,042

Total	W	1,101,710		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).

For the nine-month periods ended September 30, 2024 and 2023, right-of-use assets related to leases increased by W 224,696 million and W 289,678, respectively.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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 nine-month period September 30, 2024, and 2023, are as follows:


(In millions of Korean won)	2024		2023
Depreciation of right-of-use assets
Property and building	W	224,482		222,434
Machinery and communication line facilities		19,257		19,726
Others		61,023		52,873

Total	W	304,762		295,033

Depreciation of investment property		—		15
Interest expense relating to lease liabilities	W	37,229		38,268
Expense relating to short-term leases		5,784		9,618
Expense relating to leases of low-value assets that are not short-term leases		19,113		17,875
Expense relating to variable lease payments not included in lease liabilities		10,792		6,539

The total cash outflow for leases for the nine-month periods ended September 30, 2024 and 2023 is W 344,704 million and W 360,968 million, respectively.

17.

Retained Earnings

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


(In millions of Korean won)	September 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		9,241,550		9,060,819

Total	W	14,675,161		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 September 30, 2024 and 2023, and December 31, 2023

18.

Other Components of Equity

(1)

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


(In millions of Korean won)	September 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		6,237			8,773
Equity transactions within consolidated entities ¹		(428,623	)		(416,336	)

Total	W	(634,995	)		(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 September 30, 2024 and December 31, 2023, the details of treasury stock, are as follows:


	September 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 September 30, 2024, is expected to be used 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 nine-month periods ended September 30, 2024 and 2023:


(In millions of Korean won)	2024				2023
	Three-month		Nine-month		Three-month		Nine-month
Revenue from contracts with customers	W	6,594,289		19,681,289		6,639,548		19,519,119
Revenue from other sources		60,326		174,299		57,894		169,520

Total	W	6,654,615		19,855,588		6,697,442		19,688,639

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(2)

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


(In millions of Korean won)	2024				2023
	Three-month		Nine-month		Three-month		Nine-month
Services provided	W	5,751,952		17,251,247		5,842,461		17,274,449
Sales of goods		902,663		2,604,341		854,981		2,414,190

Total	W	6,654,615		19,855,588		6,697,442		19,688,639

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)	September 30, 2024		December 31, 2023
Contract assets ¹	W	1,174,068		1,130,745
Contract liabilities ¹		293,093		311,023
Deferred revenue ²		86,280		81,067

The Group recognized contract assets of W 323,198 million and contract liabilities of W 13,755 million for long-term construction contract as of September 30, 2024 (December 31, 2023: contract assets of W 308,821 million and contract liabilities of W 32,274 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)	September 30, 2024		December 31, 2023
Incremental costs of obtaining a contract	W	1,649,960		1,656,711
Cost of contract performance		71,906		70,757

Total	W	1,721,866		1,727,468

As of September 30, 2024, the Group recognized W 1,285,231 million (nine-month period ended September 30, 2023: W 1,322,822 million) of operating expenses related to contract assets..

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(5)

For the three- and nine-month periods ended September 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		Nine- month		Three- month		Nine- month
Revenue recognized from the beginning balance of contract liabilities
Allocation of the transaction price	W	50,466		166,251		44,874		179,772
Deferred revenue of joining/installment fees		10,023		32,727		9,866		33,074

Total	W	60,489		198,978		54,740		212,846

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

20.

Operating Expenses

(1)

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


(In millions of Korean won)	2024				2023
	Three-month		Nine-month		Three-month			Nine-month
Employee benefit cost	W	1,118,334		3,432,409		1,191,032			3,391,569
Depreciation		710,135		2,114,914		683,180			2,030,237
Depreciation of right-of-use assets		98,571		304,762		97,886			295,032
Amortization of intangible assets		156,045		484,926		156,852			471,282
Commissions		338,843		1,024,231		328,157			928,744
Interconnection charges		107,515		319,606		107,442			328,340
International interconnection fees		39,315		102,600		26,620			118,638
Purchase of inventories		881,601		2,597,849		950,249			2,445,482
Changes of inventories		60,868		9,086		(70,515	)		1,755
Sales commissions		568,316		1,689,037		581,436			1,746,530
Service cost		536,023		1,602,824		631,156			1,668,482
Utilities		151,132		415,562		117,943			310,420
Taxes and dues		68,615		198,343		58,895			187,477
Rent		34,209		110,390		42,794			124,269
Insurance premium		20,320		51,961		16,467			48,737
Installation fee		40,325		120,376		38,436			129,785
Advertising expenses		44,359		117,168		38,634			114,094
Research and development expenses		44,505		138,683		50,246			134,771
Card service costs		734,794		2,247,715		792,419			2,377,029
Others		436,680		1,308,550		536,180			1,451,820

Total	W	6,190,505		18,390,992		6,375,509			18,304,493

(2)

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


(In millions of Korean won)	2024				2023
	Three-month		Nine-month		Three-month		Nine-month
Salaries & Wages	W	1,037,475		3,189,483		1,114,986		3,164,468
Post-employment benefits (defined benefit plan)		49,308		148,051		44,354		136,142
Post-employment benefits (defined contribution plan)		23,684		69,673		24,110		64,577
Share-based payment		2,444		6,292		3,012		12,350
Others		5,423		18,910		4,570		14,032

Total	W	1,118,334		3,432,409		1,191,032		3,391,569

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

21.

Other Income and Other Expenses

(1)

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


(In millions of Korean won)	2024				2023
	Three-month		Nine-month		Three-month		Nine-month
Gain on disposal of property and equipment and investment properties	W	8,773		31,257		5,854		18,471
Gain on disposal of intangible assets		199		311		—		300
Gain on disposal of right-of-use assets		887		2,414		265		2,126
Property and Equipment loss recovery income		40,712		106,312		36,501		106,349
Income from government subsidies		9,102		23,309		8,394		25,753
Gain on disposal of investments in associates		17,968		19,074		873		6,927
Gain on disposal of subsidiaries		—		52,688		28,825		28,825
Others		11,835		34,408		11,112		35,004

Total	W	89,476		269,773		91,824		223,755

(2)

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


(In millions of Korean won)	2024					2023
	Three-month			Nine-month		Three-month		Nine-month
Loss on disposal of properties and equipment	W	12,059			48,404		19,489		51,389
Loss on disposal of intangible assets		431			8,270		1,698		4,724
Loss on disposal of right-of-use assets		148			1,423		193		1,142
Loss on disposal of investments in associates		5			17		—		—
Loss on disposal of subsidiaries		—			3,154		—		—
Donations		801			5,127		6,262		23,523
Other allowance for bad debts		(129	)		20,990		9,696		21,347
Others		27,101			71,430		21,747		91,596

Total	W	40,416			158,815		59,085		193,721

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

22.

Financial Income and Costs

(1)

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


(In millions of Korean won)	2024					2023
	Three-month			Nine-month		Three-month			Nine-month
Interest income	W	74,441			230,916		72,130			203,866
Gain on foreign currency transactions		6,035			13,943		5,085			15,756
Gain on foreign currency translation		1,811			22,726		(262	)		14,220
Gain on derivatives transactions		39			3,248		7,504			12,275
Gain on valuation of derivatives		(152,859	)		76,974		61,512			159,403
Gain on disposal of trade receivables		—			—		—			3,441
Dividend income		15,233			57,445		11,541			45,863
Others		1,621			9,701		7,926			9,972

Total	W	(53,679	)		414,953		165,436			464,796

(2)

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


(In millions of Korean won)	2024					2023
	Three-month			Nine-month		Three-month			Nine-month
Interest expenses	W	83,201			278,064		89,210			260,075
Loss on foreign currency transactions		2,605			8,643		10,029			25,890
Loss on foreign currency translation		(143,488	)		82,764		77,559			203,176
Loss on derivatives transactions		2,275			2,275		17			17
Loss on valuation of derivatives		2,323			2,677		(13,313	)		5,436
Loss on disposal of trade receivables		1,148			4,737		1,919			8,984
Others		423			21,851		1,509			38,631

Total	W	(51,513	)		401,011		166,930			542,209

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 25.6%.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

24.

Earnings per Share

Basic earnings per share for the three- and nine-month periods ended September 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		Nine-month		Three-month		Nine-month
Profit attributable to ordinary shares (In millions of Korean won)	W	357,075		1,125,113		264,001		954,581
Weighted average number of ordinary shares outstanding (In number of shares)		245,825,775		245,937,306		248,229,697		251,119,400

Basic earnings per share (In Korean won)	W	1,453		4,575		1,064		3,801

(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			Nine-month			Three-month			Nine-month
Profit attributable to ordinary shares (In millions of Korean won)	W	357,075			1,125,113			264,001			954,581
Adjusted net income attributable to ordinary shares (In millions of Korean won)		(213	)		(454	)		(130	)		(574	)
Diluted profit attributable to ordinary shares (In millions of Korean won)		356,862			1,124,659			263,871			954,007
Number of dilutive potential ordinary shares outstanding (In number of shares)		99,797			77,760			129,329			114,355
Weighted average number of ordinary shares outstanding (In number of shares)		245,925,572			246,015,066			248,359,026			251,233,755

Diluted earnings per share (In Korean won)	W	1,451			4,572			1,062			3,797

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

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

25.

Cash Generated from Operations

(1)

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


(In millions of Korean won)	2024			2023
1. Profit for the period	W	1,186,715			1,030,429
2. Adjustments for:
Income tax expense		408,049			305,640
Interest income ¹		(310,295	)		(287,630	)
Interest expense ¹		320,365			300,861
Dividends income ²		(59,429	)		(47,630	)
Depreciation		2,147,100			2,068,423
Amortization of intangible assets		494,165			477,388
Depreciation of right-of-use assets		304,762			295,033
Provisions for severance benefits (defined benefits)		159,757			145,811
Impairment losses on trade receivables		136,800			129,326
Share of net profit or loss of associates and joint ventures		(5,052	)		826
Gain on disposal of subsidiaries and associates		(68,591	)		(35,752	)
Loss on disposal of property, equipment and investment properties ³		17,234			22,376
Impairment loss on property and equipment		—			522
Gain on disposal of right-of-use assets		(991	)		(984	)
Loss on disposal of intangible assets		7,959			4,424
Impairment loss on intangible assets		857			695
Loss on foreign currency translation		60,008			188,956
Gain on valuation and settlement of derivatives		(75,312	)		(149,220	)
Loss on disposal of financial assets at amortized cost		1			1
Gain on disposal of financial assets at fair value through profit or loss		(4,103	)		(1,214	)
Loss on valuation of financial assets at fair value through profit or loss ⁴		9,164			5,432
Others		99,071			115,876
3. Changes in operating assets and liabilities
Increase in trade receivables		(325,288	)		(469,166	)
Decrease (Increase) in other receivables		131,218			(1,591,277	)
Decrease (Increase) in other current assets		(165,743	)		3,165
Increase in other non-current assets		(56,095	)		(67,744	)
Decrease (Increase) in inventories		15,939			(25,502	)
Increase (decrease) in trade payables		(114,004	)		349,132
Increase (decrease) in other payables		58,865			2,052,692
Increase (decrease) in other current liabilities		375,341			(15,577	)
Increase (decrease) in other non-current liabilities		(9,211	)		5,272
Increase (decrease) in provisions		(2,651	)		2,783
Increase (decrease) in deferred revenue		(1,401	)		489
Decrease in plan assets		242,916			178,544
Payment of post-employment benefits (defined benefit)		(312,051	)		(272,722	)

4. Cash generated from operations (1+2+3)		4,666,069			4,719,678

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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 W 79,379 million (For the nine-month period ended September 30, 2023: W 83,764 million) recognized as operating revenue and interest expense of W 42,301 million (For the nine-month periods ended September 30, 2023: W 41,993 million) recognized as operating expense, for the nine-month period ended September 30, 2024, are included in the adjustment.

²	BC Card Co., Ltd. recognized dividend income as operating revenue. Dividend income of W 1,701 million recognized as operating revenue for the nine-month period ended September 30, 2024 (nine-month period ended September 30, 2023: W 1,758 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. Loss on disposal of investment properties of W 87 million (For the nine-month periods ended September 30, 2023: gain on disposal of investment properties of W 10,542 million) recognized as operating revenue and expense, for the nine-month period ended September 30, 2024, is included in the adjustment.

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. Net loss on valuation of financial assets at fair value through profit or loss of W 2,312 million (For the nine-month period ended September 30, 2023: net gain on valuation of financial assets at fair value through profit or loss of W 10,514 million) that is recognized as operating revenue and expense, for the nine-month period ended September 30, 2024, is included in the adjustment.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(2)

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


(In millions of Korean won)	2024			2023
Reclassification of current portion of borrowings	W	3,126,734			1,632,405
Reclassification of construction-in-progress to property and equipment		1,342,896			1,922,436
Change of other payables relating to acquisition of property and equipment		(44,994	)		(224,370	)
Change of other payables relating to acquisition of intangible assets		(290,400	)		(189,086	)
Reclassification of other payables from net defined benefit liabilities		(14,144	)		(12,965	)
Increase in financial assets due to stock exchange		52,841			—

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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 nine-month periods ended September 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	10,218,165			(514,277	)		—		64,970			—			(234	)		9,768,624
Lease liabilities		1,179,909			(266,463	)		227,146		—			264			(39,146	)		1,101,710
Derivative liabilities		24,547			(855	)		—		—			837			(22,223	)		2,306
Derivative assets		(159,211	)		1,118			—		(59,494	)		(16,881	)		22,486			(211,982	)

Total	W	11,263,410			(780,477	)		227,146		5,476			(15,780	)		(39,117	)		10,660,658


(In millions of Korean won)	2023
							Others
	Beginning			Cash flows			Acquisition			Changes in FX rate			Fair value change		Other changes			Ending
Borrowings	W	10,006,685			83,014			(97	)		163,241			1,483		55,139			10,309,465
Lease liabilities		1,172,038			(293,222	)		298,384			—			38		(26,277	)		1,150,961
Derivative liabilities		33,555			—			—			204			745		(33,688	)		816
Derivative assets		(190,830	)		48,183			—			(152,675	)		34,592		22,812			(237,918	)

Total	W	11,021,448			(162,025	)		298,287			10,770			36,858		17,986			11,223,324

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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 nine-month periods ended September 30, 2024 and 2023, are as follows:


(In millions of Korean won)
	2024
	Operating revenues						Operating profit					Depreciation and amortization¹
	Three- month			Nine- month			Three- month		Nine- month			Three- month			Nine- month
ICT	W	4,764,983			14,008,107			338,858		1,091,489			805,837			2,415,088
Finance		859,699			2,640,662			31,374		106,297			8,400			25,339
Satellite TV		177,342			531,432			10,692		36,377			11,890			36,499
Real estate		144,902			431,539			17,719		57,269			17,050			52,389
Others		2,000,523			6,017,508			51,837		183,909			151,921			456,635

Subtotal		7,947,449			23,629,248			450,480		1,475,341			995,098			2,985,950
Elimination		(1,292,834	)		(3,773,660	)		13,630		(10,745	)		(30,347	)		(81,348	)

Consolidated amount	W	6,654,615			19,855,588			464,110		1,464,596			964,751			2,904,602

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 September 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	2023
	Operating revenues						Operating profit				Depreciation and amortization¹
	Three- month			Nine- month			Three- month		Nine- month		Three- month			Nine- month
ICT	W	4,672,959			13,779,371			193,502		989,069		786,437			2,348,258
Finance		921,178			2,764,515			22,952		66,794		8,421			28,632
Satellite TV		180,671			540,358			10,812		45,947		12,990			40,178
Real estate		139,259			391,252			16,843		44,258		17,745			52,647
Others		2,059,087			5,888,033			71,948		237,990		142,188			417,612

Subtotal		7,973,154			23,363,529			316,057		1,384,058		967,781			2,887,327
Elimination		(1,275,712	)		(3,674,890	)		5,876		88		(29,863	)		(90,776	)

Consolidated amount	W	6,697,442			19,688,639			321,933		1,384,146		937,918			2,796,551

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

(3)

Operating revenues for the nine-month periods ended September 30, 2024 and 2023, and non-current assets as of September 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		Nine-month		September 30, 2024
Domestic	W	6,611,396		19,724,402		20,004,382
Overseas		43,219		131,186		224,445

Total	W	6,654,615		19,855,588		20,228,827


(In millions of Korean won)	2023
	Operating revenues				Non-current assets¹
	Three months		Nine months		December 31, 2023
Domestic	W	6,657,081		19,561,334		20,725,694
Overseas		40,361		127,305		183,344

Total	W	6,697,442		19,688,639		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 September 30, 2024 and 2023, and December 31, 2023

28.

Related Party Transactions

(1)

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


Relationship		Name of Entity
Associates and joint ventures		51 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 September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)		September 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	1,085		205,741		557		—		809		—
	Little Big Pictures		235		4,796		—		—		5		—
	K-Realty 11th Real Estate Investment Trust Company		50		1,283		—		—		—		5,099
	K-Realty No.3 Real Estate General Private Placement Investment		83		—		—		—		—		—
	Others		3,126		875		—		178		12,709		—
Others	Others		5		253		—		1		978		—

	Total	W	4,584		212,948		557		179		14,501		5,099

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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 nine-month periods ended September 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	23,786		—		14,628		—		—
	HD Hyundai Robotics Co., Ltd.		57		—		—		—		—
	K-Realty 11th Real Estate Investment Trust Company		27		150		1,998		—		14
	K-Realty No.3 Real Estate General Private Placement Investment Company		7,580		247		—		—		—
	Others²		17,564		476		27,062		1		—
Others	Others		32		4		206		1,320		—

	Total	W	49,046		877		43,894		1,321		14

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

²	Transactions with LS Marine Solution Co., Ltd. and QTT Global (Group) Company Limited before they were classified as non-affiliated companies are included.

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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	17,297		—		8,580		—		—
	Hyundai Robotics Co., Ltd.		59		—		182		—		—
	K-Realty 11th Real Estate Investment Trust Company		137		150		1,884		—		19
	Others²		15,748		619		30,417		137		—

	Total	W	33,241		769		41,063		137		19

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 a 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	5,581		—		—		6,108		—		—
	K-Realty 11th Real Estate Investment Trust Company		—		140		400		—		199		507
	Others^1,2		—		—		4,769		—		—		1,630

	Total	W	5,581		140		5,169		6,108		199		2,137

¹	Transactions with LS Marine Solution Co., Ltd. and QTT Global (Group) Company Limited before they were classified as non-affiliated companies are included.

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

(4)

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


(In millions of Korean won)	2024		2023
Sort-term benefits	W	1,224		1,089
Post-employment benefits		145		71
Share-based compensation		883		321

Total	W	2,252		1,481

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(5)

Fund transactions with related parties for the nine-month periods ended September 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		—		1,788		—
TeamFresh Corp.²		—		—		52,841
Others		—		—		35,575
Others
Rebellions Co.,Ltd.		—		—		9,999

Total	W	—		1,788		104,415


(In millions of Korean won)	2023
	Borrowing transactions¹				Equity contributions in cash
	Borrowings		Repayments		Equity contributions in cash
Associates and joint ventures
K-Realty 11th Real Estate Investment Trust Company		—		765		—
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
Pacific geumto no.75 private hybrid asset fund		—		—		19,000
Kiamco Data Center Blind Fund		—		—		7,500
Others ³		—		—		7,486

Total	W	—		765		66,486

¹	Borrowing transactions include lease 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	Transactions with Studio Discovery Co., Ltd. before it was classified as an associate are included.

(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 September 30, 2024 the Group has a plan to make an additional investment of W 102,108 million.

(7)

As of September 30, 2024, the limit of the credit card contract provided by the Group to K Bank, Inc. is W 1,285 million (December 31, 2023: W 1,050 million).

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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 September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024				December 31, 2023
	Carrying amount		Fair value		Carrying amount		Fair value
Financial assets
Cash and cash equivalents	W	3,953,893		¹		2,879,554		¹
Trade and other receivables
Financial assets at amortized cost ²		7,893,368		¹		8,326,229		¹
Financial assets at fair value through other comprehensive income		260,525		260,525		116,198		116,198
Other financial assets
Financial assets at amortized cost		717,457		¹		1,385,921		¹
Financial assets at fair value through profit or loss		1,117,997		1,117,997		939,661		939,661
Financial assets at fair value through other comprehensive income		1,901,045		1,901,045		1,680,168		1,680,168
Derivative financial assets for hedging		211,982		211,982		159,211		159,211

Total	W	16,056,267				15,486,942

Financial liabilities
Trade and other payables	W	7,698,943		¹		8,317,822		¹
Borrowings		9,768,624		9,685,758		10,218,165		9,979,545
Other financial liabilities
Financial liabilities at amortized cost		917,958		¹		915,185		¹
Financial liabilities at fair value through profit or loss		125,008		125,008		136,106		136,106
Derivative financial liabilities for hedging		2,306		2,306		24,547		24,547

Total	W	18,512,839				19,611,825

¹	The Group did not conduct fair value estimation as the book amount is a reasonable approximation of the fair value.

²	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 September 30, 2024 and 2023, and December 31, 2023

(2)

Fair Value Hierarchy

•

Financial instruments that are measured at fair value are categorized by 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 September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024
	Level 1		Level 2		Level 3		Total
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	W	—		260,525		—		260,525
Other financial assets
Financial assets at fair value through profit or loss		8,129		239,078		870,790		1,117,997
Financial assets at fair value through other comprehensive income		1,450,091		5,499		445,455		1,901,045
Derivative financial assets for hedging		—		211,982		—		211,982

Total	W	1,458,220		717,084		1,316,245		3,491,549

Liabilities
Borrowings	W	—		9,685,758		—		9,685,758
Other financial liabilities
Financial liabilities at fair value through profit or loss		—		193		124,815		125,008
Derivative financial liabilities for hedging		—		2,306		—		2,306

Total	W	—		9,688,257		124,815		9,813,072

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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 September 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		63,255			1,011			—
Transfer		49,299			(183	)		5,772
Disposal		(22,107	)		—			—
Amount recognized in profit or loss		11,511			—			(15,518	)
Amount recognized in other comprehensive income		—			601			—

Ending balance	W	870,790			445,455			124,815


(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		149,181			10,267			—			—
Transfer		(2,057	)		(5,554	)		(1,113	)		(7,363	)
Changes in consolidation scope		252			—			—			—
Disposal		(36,088	)		(6	)		—			(5,205	)
Amount recognized in profit or loss		(19,203	)		(61	)		—			9,506
Amount recognized in other comprehensive income		—			(593	)		—			—

Ending balance	W	704,154			501,182			—			138,218

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(4)

Valuation Technique

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


(In millions of Korean won)	September 30, 2024
	Fair value		Level		Major valuation techniques
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	W	260,525		2	DCF Model
Other financial assets
Financial assets at fair value through profit or loss		1,109,868		2,3	DCF Model, Adjusted Net Asset Model,
Financial assets at fair value through other comprehensive income		450,954		2,3	DCF Model, Market Approach Model
Derivative financial assets for hedging		211,982		2	DCF Model
Liabilities
Borrowings		9,685,758		2	DCF Model
Other financial liabilities
Financial liabilities at fair value through profit or loss		125,008		2,3	Binomial Option Pricing Model
Derivative financial liabilities for hedging		2,306		2	DCF Model

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

As of September 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 issued a debenture since the end of the reporting period, and the details are as follows.


(In thousands of foreign currencies)
Type	Issue date	Foreign currency	Annual interest rates	Maturity
Global 2024	Oct. 02. 2024	USD 500,000	4.125%-	Feb. 02, 2028

(2)

The Group has decided on a quarterly dividend at the Board of Directors dated October 15, 2024, and the details are as follows.


Type		Details
Dividend per share		W 500 (Total dividend: W 122,913 million)
Dividend yield		1.2%
Dividend report date		September 30, 2024
Dividend pay date		October 31, 2024

KT Corporation and Its Subsidiaries

Notes to the Consolidated Interim Financial Statements

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

(3)

The Group has implemented a special voluntary retirement system on November 8, 2024, for employees with over 15 years of continuous service. Furthermore, the construction and maintenance of network infrastructure, including tracks and power supply, will be transferred to a newly established subsidiary in January 2025.

KT Corporation

Separate Interim Financial Statements

September 30, 2024 and 2023, and December 31, 2023

ATTACHMENT: INDEPENDENT AUDITOR’S REVIEW REPORT

KT Corporation

Index

September 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 November 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 September 30, 2024, and the related Separate Interim statements of profit or loss and comprehensive income for the three-month and nine-month periods ended September 30, 2024 and 2023, and changes in equity and cash flows for the nine-month periods ended September 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 September 30, 2024, and its financial performance and its cash flows for the nine-month period ended September 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

November 14, 2024

Notice to Readers

KT Corporation

Separate Interim Statements of Financial Position

As of September 30, 2024 and December 31, 2023


(In millions of Korean won)	Notes		September 30, 2024		December 31, 2023
Assets
Current Assets
Cash and cash equivalents		4,28	W	1,608,691	W	1,242,005
Trade and other receivables, net		4,5,28		3,275,632		3,190,269
Other financial assets		4,6,28		180,821		279,451
Inventories, net		7		264,583		368,117
Other current assets		8		2,117,996		2,008,723

Total Current Assets				7,447,723		7,088,565

Non-Current Assets
Trade and other receivables, net		4,5,28		278,242		370,717
Other financial assets		4,6,28		2,265,775		2,134,324
Property and equipment, net		9		11,185,592		11,492,776
Right-of-use assets		16		928,804		976,625
Investment properties, net		9		1,111,273		1,191,592
Intangible assets, net		9		1,189,582		1,487,848
Investments in subsidiaries, associates and joint ventures		10		4,826,856		4,796,606
Net defined benefit assets		14		19,983		60,590
Other non-current assets		8		703,319		709,276

Total Non-Current Assets				22,509,426		23,220,354

Total Assets			W	29,957,149	W	30,308,919

(Continued)

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

KT Corporation

Separate Interim Statements of Financial Position

As of September 30, 2024 and December 31, 2023


(In millions of Korean won)	Notes		September 30, 2024			December 31, 2023
Liabilities
Current Liabilities
Trade and other payables		4,11,28	W	4,149,127		W	4,232,377
Borrowings		4,12,28		2,860,342			1,725,234
Other financial liabilities		4,6,28		—			660
Current tax liabilities				227,088			148,136
Provisions		13,15		84,576			91,861
Deferred income		19		53,479			39,618
Other current liabilities		4,8,16		700,261			719,605

Total Current Liabilities				8,074,873			6,957,491

Non-Current Liabilities
Trade and other payables		4,11,28		489,699			739,766
Borrowings		4,12,28		4,290,720			5,834,699
Other financial liabilities		4,6,28		1,403			23,819
Provisions		13		101,250			90,493
Deferred income		19		136,153			145,334
Deferred tax liabilities				852,489			796,087
Other non-current liabilities		4,8,16		566,490			677,691

Total Non-Current Liabilities				6,438,204			8,307,889

Total Liabilities				14,513,077			15,265,380

Equity
Share capital				1,564,499			1,564,499
Share premium				1,440,258			1,440,258
Retained earnings		17		12,579,188			12,544,425
Accumulated other comprehensive income				250,281			64,229
Other components of equity		18		(390,154	)		(569,872	)

Total Equity				15,444,072			15,043,539

Total Liabilities and Equity			W	29,957,149		W	30,308,919

(Concluded)

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 nine-month periods ended September 30, 2024 and 2023


		Three-Month and Nine-Month Periods Ended September 30
(In millions of Korean won, except per share amounts)	Notes	2024					2023
		Three-month			Nine-month		Three-month		Nine-month
Operating Revenue	19	W	4,764,983		W	14,008,107	W	4,672,959	W	13,779,371
Operating Expenses	20		4,426,125			12,916,618		4,479,457		12,790,302

Operating Profit			338,858			1,091,489		193,502		989,069
Other income	21		104,332			290,456		85,696		257,295
Other expenses	21		39,975			126,166		57,717		169,728
Finance income	22		(71,859	)		310,942		143,269		401,367
Finance costs	22		(76,657	)		283,445		136,584		427,493

Profit before Income Tax			408,013			1,283,276		228,166		1,050,510
Income tax expense	23		98,221			304,953		17,597		215,021

Profit for the Period		W	309,792		W	978,323	W	210,569	W	835,489

Earnings per share
Basic earnings per share	24	W	1,260		W	3,978	W	848	W	3,327
Diluted earnings per share	24		1,260			3,977		848		3,326

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 nine-month periods ended September 30, 2024 and 2023


			Three-Month and Nine-Month Periods Ended September 30
(In millions of Korean won)	Notes		2024						2023
			Three- month			Nine- month			Three- month			Nine- month
Profit for the period			W	309,792		W	978,323		W	210,569		W	835,489

Other comprehensive income (loss)
Items that will not be reclassified to profit or loss:
Remeasurements of the net defined benefit Assets		14		608			2,179			1,694			4,411
Valuation gains on equity instruments at fair value through other comprehensive income				(63,458	)		163,951			646			112,381
Items that are or may be subsequently reclassified to profit or loss:
Valuation gains (losses) on cash flow hedges		6		(82,009	)		55,463			42,324			88,493
Other comprehensive income from cash flow hedges reclassified to profit or loss				102,188			(44,403	)		(45,028	)		(118,774	)

Other comprehensive income (loss) for the period, net of tax				(42,671	)		177,190			(364	)		86,511

Total comprehensive income (loss) for the period			W	267,121		W	1,155,513		W	210,205		W	922,000

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 nine-month periods ended September 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				—		—		835,489			—			—			835,489
Valuation gains on financial assets at fair value through other comprehensive income		6		—		—		222			112,159			—			112,381
Remeasurements of net defined benefit assets		14		—		—		4,411			—			—			4,411
Valuation gains (losses) on cash flow hedges		6		—		—		—			(30,281	)		—			(30,281	)

Total comprehensive income for the period				—		—		840,122			81,878			—			922,000

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				—		—		—			—			(300,243	)		(300,243	)
Disposal of treasury stock				—		—		—			—			4,463			4,463
Retirement of treasury stock				—		—		(100,000	)		—			100,000			—
Others				—		—		—			—			908			908

Subtotal				—		—		(646,265	)		—			(150,450	)		(796,715	)

Balance as of September 30, 2023			W	1,564,499	W	1,440,258	W	12,541,260		W	9,206		W	(571,858	)	W	14,983,365

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				—		—		978,323			—			—			978,323
Valuation gains on financial assets at fair value through other comprehensive income		6		—		—		(11,041	)		174,992			—			163,951
Remeasurements of net defined benefit assets		14		—		—		2,179			—			—			2,179
Valuation gains (losses) on cash flow hedges		6		—		—		—			11,060			—			11,060

Total comprehensive income for the period				—		—		969,461			186,052			—			1,155,513

Transactions with owners
Dividends paid				—		—		(482,970	)		—			—			(482,970	)
Interim Dividends paid				—		—		(245,772	)		—			—			(245,772	)
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				—		—		—			—			(2,898	)		(2,898	)

Subtotal				—		—		(934,698	)		—			179,718			(754,980	)

Balance as of September 30, 2024			W	1,564,499	W	1,440,258	W	12,579,188		W	250,281		W	(390,154	)	W	15,444,072

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 nine-month periods ended September 30, 2024 and 2023


			Nine-Month Periods Ended September 30
(In millions of Korean won)	Notes		2024			2023
Cash flows from operating activities
Cash generated from operations		25	W	3,549,954		W	3,829,812
Interest paid				(211,869	)		(201,193	)
Interest received				150,207			141,627
Dividends received				92,753			106,288
Income tax paid				(174,930	)		(150,589	)

Net cash inflow from operating activities				3,406,115			3,725,945

Cash flows from investing activities
Collection of loans				25,630			28,558
Disposals of financial assets at amortized cost				297,569			313,458
Disposals of financial assets at fair value through profit or loss				18,019			2,694
Disposals of financial assets at fair value through other comprehensive income				34,299			306
Disposals of investments in subsidiaries, associates and joint ventures				27,674			65,913
Disposals of property and equipment				33,610			25,470
Disposals of intangible assets				2,116			2,620
Disposals of right-of-use assets				118			439
Loans granted				(22,336	)		(22,547	)
Acquisitions of current financial assets at amortized cost				—			(304,450	)
Acquisitions of financial assets at fair value through profit or loss				(15,367	)		(23,385	)
Acquisitions of investments in subsidiaries, associates and joint ventures				(75,670	)		(33,016	)
Acquisitions of financial assets at fair value through other comprehensive income							(10,267	)
Acquisitions of property and equipment				(1,619,104	)		(1,956,889	)
Acquisitions of intangible assets				(277,132	)		(309,736	)
Acquisitions of right-of-use assets				(683	)		(681	)

Net cash outflow from investing activities				(1,571,257	)		(2,221,513	)

Cash flows from financing activities
Proceeds from borrowings				698,700			2,207,827
Settlement of derivative contracts (inflow)				—			46,525
Dividends paid				(728,742	)		(501,843	)
Repayments of borrowings				(1,174,038	)		(2,206,730	)
Acquisition of treasury stock				(27,100	)		(300,086	)
Settlement of derivative contracts (outflow)				(855	)
Decrease in lease liabilities				(236,112	)		(238,972	)

Net cash outflow from financing activities		26		(1,468,147	)		(993,279	)

Effect of exchange rate change on cash and cash equivalents				(25	)		(130	)

Net increase (decrease) in cash and cash equivalents				366,686			511,023
Cash and cash equivalents
Beginning of the period				1,242,005			966,307

End of the period			W	1,608,691		W	1,477,330

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 September 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 Government-Investment Enterprises Management Basic Act 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 all government-owned shares in accordance with the Korean government’s privatization plan. As of September 30, 2024, the Korean government no longer owns any shares in the Company.

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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, reformatted, and translated into English from the original Korean language financial statements.

The Separate Interim financial statements of the Company for the nine-month period ended September 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 the following standards and interpretations for the first time for their annual reporting period commencing 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 September 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 only has to 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 Statement of Cash Flows and K-IFRS 1107 Financial Instruments: Disclosures (Amendment) - Supplier Finance Agreements

The amendments add a disclosure objective to K-IFRS 1007 Cash Flow Statement stating that an entity is required to disclose information about its supplier finance arrangements 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 was 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 arrangements’ 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 the arrangements

•

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 arrangements and their impact

•

Liquidity risk information

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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

The amendments to K-IFRS 1001 add additional disclosure requirements required by other standards for transactions related to virtual assets, setting out disclosure requirements for 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 about virtual assets, the accounting policy, applied and each virtual asset’s acquisition method, cost, and the fair value at the end of the reporting period is required. Also, when issuing a virtual asset, the entity’s obligations and 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 number of virtual assets held after issuance, and important contract details shall be disclosed.

(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 Effects of Changes in Foreign Exchange Rates and K-IFRS 1101 First - Time Adoption of Korean International Financial Reporting Standards (Amendment) - Lack of Exchangeability

These amendments are effective for annual reporting periods beginning on or after January 1, 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 September 30, 2024 and 2023, and December 31, 2023

2.3

Accounting Policies

The material accounting policies and methods 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 resulting from the application of amendments and enactments of standards described in Note 2.2 (1) and as detailed below.

2.3.1

Income Tax Expense

3.	Critical Accounting Estimates and Assumptions

The preparation of financial statements requires the Company to make estimates and assumptions about the future. Management also needs to exercise judgement in applying the Company’s accounting policies. Estimates and assumptions are continuously evaluated and are based on historical experience and other factors, including reasonable expectations of future events under the given circumstances. As the resulting accounting estimates will, by definition, rarely equal the actual results, they involve a significant risk of resulting in material adjustments.

KT Corporation

Notes to the Separate Interim Financial Statements

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

4.	Financial Instruments by Category

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


(In millions of Korean won)	September 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	1,608,691		—		—		—		1,608,691
Trade and other receivables		3,293,349		—		260,525		—		3,553,874
Other financial assets		80,465		501,511		1,654,368		210,252		2,446,596


(In millions of Korean won)	September 30, 2024
Financial liabilities	Financial liabilities at amortized cost		Financial liabilities at FVTPL		Derivatives used for hedging		Others		Total
Trade and other payables¹	W	4,276,120		—		—		—		4,276,120
Borrowings		7,151,062		—		—		—		7,151,062
Other financial liabilities		—		1,403		—		—		1,403
Lease liabilities		—		—		—		792,893		792,893

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 September 30, 2024 and 2023, and December 31, 2023

5.	Trade and Other Receivables

(1)

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


(In millions of Korean won)	September 30, 2024
	Total amounts		Provision for impairment			Present value discount			Carrying amount
Current assets
Trade receivables	W	3,206,716		(286,785	)		(8,198	)		2,911,733
Other receivables		400,622		(34,920	)		(1,803	)		363,899

Total	W	3,607,338		(321,705	)		(10,001	)		3,275,632

Non-current assets
Trade receivables	W	182,337		(927	)		(12,513	)		168,897
Other receivables		116,713		(430	)		(6,938	)		109,345

Total	W	299,050		(1,357	)		(19,451	)		278,242


(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 September 30, 2024 and 2023, and December 31, 2023

(2)

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


(In millions of Korean won)	September 30, 2024			December 31, 2023
Loans	W	36,697			40,069
Receivables		245,971			261,692
Accrued income		8,051			5,275
Refundable deposits		217,876			253,219
Less: Provision for impairment		(35,351	)		(30,047	)

Total		473,244			530,208

(3)

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

(4)

The Company classifies a certain portion of the trade receivables as financial assets at fair value through other comprehensive income, 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 September 30, 2024 and 2023, and December 31, 2023

6.	Other Financial Assets and Liabilities

(1)

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


(In millions of Korean won)	September 30, 2024			December 31, 2023
Other financial assets
Financial assets at amortized cost ¹	W	80,465			377,996
Financial assets at fair value through profis or loss ²		501,511			441,321
Financial assets at fair value through other comprehensive income		1,654,368			1,437,684
Derivatives used for hedging		210,252			156,774
Less: Non-current		(2,265,775	)		(2,134,324	)

Current	W	180,821			279,451

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

Current	W	—			660

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

As of September 30, 2024, the Company provided investment in Korea Software Financial Cooperative and others amounting to W 1,136 million (December 31, 2023: W 1,136 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 September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024			December 31, 2023
Debt instruments	W	501,462			440,257
Derivative held for trading ¹		49			1,064
Less: Non-current		(501,511	)		(441,321	)

Current	W	—			—

Call option is recognized in connection with the acquisition of Epsilon Global Communications Pte. Ltd. (Note 15).

KT Corporation

Notes to the Separate Interim Financial Statements

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

The maximum exposure to credit risks of 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 September 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 September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024			December 31, 2023
Equity instruments (Listed)	W	1,453,179			1,236,495
Equity instruments (Unlisted)		201,189			201,189
Less: Non-current		(1,654,368	)		(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 September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024					December 31, 2023
	Assets			Liabilities		Assets			Liabilities
Currency swap ¹	W	210,252			—		156,774			23,076
Less: Non-current		(109,892	)		—		(105,680	)		(22,416	)

Current	W	100,360			—		51,094			660

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 September 30, 2024 and 2023, and December 31, 2023

Details of valuation gains and losses from derivatives for risk hedging purposes for the nine-month periods ended September 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

61,112

—

14,718

153,946

204

(40,471

)

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 amounts to valuation gains of W 1,618 million for the year ended September 30, 2024 (For the nine-month period ended September 30, 2023: valuation gains of W 1,271 million).

(5)

Financial Liabilities at fair value through profit or loss

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


(In millions of Korean won)	September 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 September 30, 2024 and 2023, and December 31, 2023

7.	Inventories

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


(In millions of Korean won)	September 30, 2024							December 31, 2023
	Acquisition cost		Valuation allowance			Carrying amount		Acquisition cost		Valuation allowance			Carrying amount
Merchandise	W	320,557		(55,974	)		264,583		448,307		(80,190	)		368,117

Cost of inventories recognized as expenses for the nine-month periods ended September 30, 2024 amounts to W 1,930,432 million (For the nine-month period ended September 30, 2023: W 1,890,348 million), and reversal valuation loss on inventory amounts to W 24,216 million for the nine-month periods ended September 30, 2024 (For the nine-month periods ended September 30, 2023: W 19,070 million).

8.	Other Assets and Liabilities

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


(In millions of Korean won)	September 30, 2024			December 31, 2023
Other assets
Advance payments	W	56,109			60,065
Prepaid expenses		212,237			79,051
Contract costs		1,793,608			1,804,448
Contract assets		759,361			774,435
Less: Non-current		(703,319	)		(709,276	)

Current	W	2,117,996			2,008,723

Other liabilities
Advances received ¹	W	188,941			245,797
Withholdings		38,345			39,214
Unearned revenue		3,126			951
Lease liabilities		792,893			851,610
Contract liabilities		243,446			259,724
Less: Non-current		(566,490	)		(677,691	)

Current	W	700,261			719,605

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 September 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 nine-month periods ended September 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		1,558,337			1,727,698
Disposal and termination		(45,868	)		(55,261	)
Depreciation		(1,807,568	)		(1,740,212	)
Transfer to investment properties		46,650			(85,051	)
Others		(58,735	)		(98,877	)

Ending, net	W	11,185,592			11,288,459

(2)

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


(In millions of Korean won)	2024			2023
Beginning, net	W	1,191,592			1,137,489
Depreciation		(33,669	)		(34,926	)
Transfer to property and equipment		(46,650	)		85,051

Ending, net	W	1,111,273			1,187,614

(3)

As of September 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 W 120,834 million for one year or less, W 248,808 million for more than one year and less than five years, W 474,477 million for over five years, and W 844,119 million in total.

(4)

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

(In millions of Korean won)

September 30, 2024

Collateral

Carrying
amount

Secured
amount

Related account

Related
amount

Secured
party

Land and buildings

171,132

35,590

Deposits

29,917

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 September 30, 2024 and 2023, and December 31, 2023

(5)

Changes in intangible assets for the nine-month periods ended September 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		64,506			104,177
Disposal and termination		(9,549	)		(7,387	)
Amortization		(353,223	)		(357,091	)

Ending, net	W	1,189,582			1,595,378

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 W 65,057 million (December 31, 2023: W 65,057 million) and W 55,978 million (December 31, 2023: W 54,717 million), respectively as of September 30, 2024.

10.

Investments in Subsidiaries, Associates and Joint Ventures

(1)

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


(In millions of Korean won)	September 30, 2024		December 31, 2023
Subsidiaries	W	4,411,654		4,381,161
Associates and joint ventures		415,202		415,445

Total	W	4,826,856		4,796,606

Investments in subsidiaries as of September 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 (%)			September 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 Corporation

Notes to the Separate Interim Financial Statements

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


(In millions of Korean won)	Location		Percentage of ownership (%)			Carrying amount
(In millions of Korean won)	Location		Percentage of ownership (%)			September 30, 2024		December 31, 2023
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 September 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.

As of September 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.

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

Investments in associates and joint ventures as of September 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 (%)			September 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.²		Korea		—			—		5,409
Others							117,510		112,179

Total							415,202		415,445

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

As of September 30, 2024, this entity is excluded from associates due to loss of significant influence.

(2)

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

KT Corporation

Notes to the Separate Interim Financial Statements

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


(In millions of Korean won)	2024			2023
Beginning	W	4,796,606			4,879,219
Acquisition		75,670			33,016
Disposal ¹		(41,820	)		(39,993	)
Others		(3,600	)		(771	)

Ending	W	4,826,856			4,871,471

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

11.

Trade and Other Payables

(1)

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


(In millions of Korean won)	September 30, 2024		December 31, 2023
Current liabilities
Trade payables	W	765,235		713,833
Other payables		3,383,892		3,518,544

Total	W	4,149,127		4,232,377

Non-current liabilities
Other payables	W	489,699		739,766

(2)

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


(In millions of Korean won)	September 30, 2024			December 31, 2023
Non-trade payable	W	2,301,068			2,880,385
Accrued expenses		1,102,260			879,613
Operating deposits		375,741			401,271
Others		94,522			97,041
Less: Non-current		(489,699	)		(739,766	)

Current	W	3,383,892			3,518,544

KT Corporation

Notes to the Separate Interim Financial Statements

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

12.

Borrowings

(1)

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

Debentures


(In millions of Korean won and foreign currencies in thousands)			September 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	131,960	USD 100,000	W	128,940
MTNP notes	Jul. 18, 2026	2.500%	USD 400,000		527,840	USD 400,000		515,760
MTNP notes	Jul. 19, 2024	—	—		—	JPY 400,000		3,651
MTNP notes	Sep. 1, 2025	1.000%	USD 400,000		527,840	USD 400,000		515,760
FR notes ²	Nov. 1, 2024	Compounded SOFR +1.210%	USD 350,000		461,860	USD 350,000		451,290
MTNP notes	Jan. 21, 2027	1.375%	USD 300,000		395,880	USD 300,000		386,820
MTNP notes	Aug. 8, 2025	4.000%	USD 500,000		659,800	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	—	—		—	—		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 September 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won and foreign currencies in thousands)			September 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					6,765,180					6,976,921
Less: Current portion						(2,759,849	)				(1,224,741	)
Discount on bonds						(15,105	)				(18,468	)

	Total				W	3,990,226				W	5,733,712

As of September 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 was terminated in 2007.

²	The Daily SOFR is approximately 4.960% as of September 30, 2024.

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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			September 30, 2024			December 31, 2023
Export-Import Bank of Korea	Inter-Korean Cooperation Fund ¹		Jul. 10, 2026		1.000	%	W	987			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		4.090	%		100,000			—

	Subtotal							400,987			601,480
	Less: Current portion							(100,493	)		(500,493	)

	Net						W	300,494			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 September 30, 2024, is as follows:


(In millions of Korean won)	Bonds
	In local currency		In foreign currency		Sub- total		Borrowings		Total
Oct.1, 2024 ~ Sep. 30, 2025	W	1,115,000		1,649,500		2,764,500		100,493		2,864,993
Oct.1, 2025 ~ Sep. 30, 2026		750,000		527,840		1,277,840		494		1,278,334
Oct.1, 2026 ~ Sep. 30, 2027		420,000		395,880		815,880		300,000		1,115,880
Oct.1, 2027 ~ Sep. 30, 2028		405,000		—		405,000		—		405,000
After Oct.1, 2028		1,370,000		131,960		1,501,960		—		1,501,960

Total	W	4,060,000		2,705,180		6,765,180		400,987		7,166,167

KT Corporation

Notes to the Separate Interim Financial Statements

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

13.

Provisions

Changes in provisions for the nine-month period ended September 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			9,436			(151	)		9,311
Usage		(1,222	)		(762	)		(210	)		(2,194	)
Reversal		(3,093	)		(552	)		—			(3,645	)

Ending balance	W	21,590			123,869			40,367			185,826

Less: Current		(21,590	)		(22,619	)		(40,367	)		(84,576	)
Non-current		—			101,250			—			101,250


	2023
(In millions of Korean won)	Litigation			Restoration cost			Others			Total
Beginning balance	W	30,938			96,667			39,489			167,094
Increase (transfer)		2			12,857			354			13,213
Usage		—			(762	)		(309	)		(1,071	)
Reversal		(2	)		(584	)		—			(586	)

Ending balance	W	30,938			108,178			39,534			178,650

Less: Current		(30,938	)		(18,392	)		(39,306	)		(88,636	)
Non-current		—			89,786			228			90,014

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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 September 30, 2024 and December 31, 2023, are determined as follows:


(In millions of Korean won)	September 30, 2024			December 31, 2023
Present value of defined benefit obligations	W	1,580,334			1,548,588
Fair value of plan assets		(1,600,317	)		(1,609,178	)

Liabilities (Assets), net	W	(19,983	)		(60,590	)

(2)

Changes in the defined benefit obligations for the nine-month periods ended September 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		84,265			81,832

Interest expense		46,235			54,997

Benefits paid		(98,754	)		(100,850	)

Ending	W	1,580,334			1,529,634

(3)

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


(In millions of Korean won)	2024			2023
Beginning	W	1,609,178			1,674,344
Interest income		48,125			61,952
Remeasurements on plan assets		1,054			5,335
Benefits paid		(95,940	)		(95,060	)
Others		37,900			55,201

Ending	W	1,600,317			1,701,772

(4)

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


(In millions of Korean won)	2024			2023
Current service cost	W	84,265			81,832
Net interest expense		(1,890	)		(6,955	)
Account transfers		(11,727	)		(9,679	)

Total expense	W	70,648			65,198

KT Corporation

Notes to the Separate Interim Financial Statements

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

15.

Commitments and Contingencies

(1)

As of September 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		987
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		7,896
Plus electronic notes payable	Industrial Bank of Korea		50,000		495
Derivatives transaction limit	Korea Development Bank and others		USD 1,970,000		USD 1,970,000

Total			KRW 1,817,940		111,110
			USD 1,970,000		1,970,000

(2)

As of September 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 36,017
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		1,056,065
Seoul Guarantee Insurance Company	Performance guarantee and others		29,178

	Total		KRW 1,088,343
			USD 59,714

(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 September 30, 2024, the Company and KT Sat Co., Ltd. are jointly and severally liable for reimbursement of W 509 million.

KT Corporation

Notes to the Separate Interim Financial Statements

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

(4)

For the nine-month period ended September 30, 2024, the Company entered into agreements with Securitization Specialty Companies (2024: First 5G 73^rd to 76^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 September 30, 2024, the Company is a defendant in 205 lawsuits with a total claimed amount of W 158,583 million. As of September 30, 2024, litigation provisions of W 21,590 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 September 30, 2024 (Note 13).

(6)

Under the agreement of bond issuance 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 September 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 September 30, 2024, the contract amount of properties and equipment acquisition agreements made but not yet recognized amounts to W 401,976 million (December 31, 2023: W 449,883 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 September 30, 2024, remaining amounts of USD 33,700 thousand and JPY 240,000 thousand will be invested through the Capital Call method in the future.

(11)

The Company has the amount of W 201,615 million (40%) of joint responsibility obligation and W 302,423 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 W 438,312 million (100%) of obligation to provide financial support as an operating investor.

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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)

(14)

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

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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)	September 30, 2024		December 31, 2023
Right-of-use assets
Property and buildings	W	824,617		853,425
Machinery and communication line facilities		42,944		50,242
Others		61,243		72,958

Total	W	928,804		976,625


(In millions of Korean won)	September 30, 2024		December 31, 2023
Lease liabilities ¹
Current	W	272,362		226,590
Non-current		520,531		625,020

Total	W	792,893		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 nine-month periods ended September 30, 2024 and 2023, right-of-use assets related to leases increased by W 212,916 million and W 220,737 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	214,554		213,587
Machinery and communication line facilities		18,976		19,341
Others		23,834		20,322

Total	W	257,364		253,250

Interest expense relating to lease liabilities		27,045		28,590
Expense relating to Short-term leases		3,403		3,111
Expense relating to leases of low-value assets that are not short-term leases		7,834		8,288

The total cash outflow for leases for the nine-month periods ended September 30, 2024 and 2023 is W 280,116 million and W 274,406 million, respectively.

KT Corporation

Notes to the Separate Interim Financial Statements

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

17.

Retained Earnings

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


(In millions of Korean won)	September 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		7,145,577		7,110,814

Total	W	12,579,188		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 September 30, 2024 and 2023, and December 31, 2023

18.

Other Components of Equity

(1)

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


(In millions of Korean won)	September 30, 2024			December 31, 2023
Treasury stock	W	(215,459	)		(398,075	)
Gain(Loss) on disposal of treasury stock		(69	)		301
Share-based compensation		6,237			8,773
Other		(180,863	)		(180,871	)

Total	W	(390,154	)		(569,872	)

(2)

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


	September 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 September 30, 2024, is expected to be used for stock compensation for the Company’s directors, employees, and for other purposes.

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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		Nine-month		Three-month		Nine-month
Revenue from contracts with customers	W	4,702,510		13,828,806		4,613,275		13,606,292
Revenue from other sources		62,473		179,301		59,684		173,079

Total	W	4,764,983		14,008,107		4,672,959		13,779,371

(2)

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


(In millions of Korean won)	2024				2023
	Three-month		Nine-month		Three-month		Nine-month
Services provided	W	4,069,040		12,157,646		4,020,006		11,991,229
Sales of goods		695,943		1,850,461		652,953		1,788,142

Total	W	4,764,983		14,008,107		4,672,959		13,779,371

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)	September 30, 2024		December 31, 2023
Contract assets¹	W	1,028,041		1,069,514
Contract liabilities¹		257,200		291,997
Deferred revenue²		73,395		70,314

The Company recognized contract assets of W 268,680 and, contract liabilities of W 13,754 million for long-term construction contracts as of September 30, 2024 (As of December 31, 2023: contract assets and liabilities of W 295,079 million and W 32,273 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 September 30, 2024 and 2023, and December 31, 2023

(4)

The contract costs recognized as assets are as follows:


(In millions of Korean won)	September 30, 2024		December 31, 2023
Incremental cost of obtaining a contract	W	1,640,026		1,647,156
Cost of contract performance		153,582		157,292

Total	W	1,793,608		1,804,448

As of September 30, 2024, the Company recognized W 1,378,068 million (nine-month period ended September 30, 2023: W 1,412,899 million) of operating expenses related to contract cost assets.

(5)

For the three- and nine-month periods ended September 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		Nine-month		Three-month		Nine-month
Revenue recognized from the beginning balance of contract liabilities
Allocation of the transaction price	W	38,343		145,994		40,422		157,857
Deferred revenue of joining/installment fees		8,673		28,898		8,665		29,025

Total	W	47,016		174,892		49,087		186,882

KT Corporation

Notes to the Separate Interim Financial Statements

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

20.

Operating Expenses

(1)

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


(In millions of Korean won)	2024				2023
	Three- month		Nine- month		Three- month			Nine- month
Employee benefit cost	W	534,586		1,706,618		634,556			1,747,974
Depreciation		607,051		1,811,257		585,874			1,740,141
Depreciation of right-of-use assets		86,997		257,364		84,207			253,250
Amortization of intangible assets		111,789		346,467		116,356			354,867
Commissions		491,112		1,439,334		470,079			1,379,269
Interconnection charges		107,890		319,981		107,749			328,647
International interconnection fees		39,315		102,600		26,620			118,639
Purchase of inventories		597,807		1,802,681		687,202			1,798,045
Changes of inventories		139,551		103,534		(16,563	)		73,232
Sales commission		623,889		1,863,071		636,416			1,899,528
Service cost		214,627		615,753		201,563			566,066
Purchase of contents		177,134		526,725		191,019			490,570
Utilities		108,165		297,153		107,134			285,780
Taxes and dues		50,866		152,038		43,698			146,813
Rent		30,681		89,859		28,703			86,061
Insurance premium		15,840		39,955		13,522			39,689
Installation fee		118,748		346,796		124,040			344,831
Advertising expenses		38,996		96,722		29,133			84,487
Research and development expenses		53,965		171,589		58,971			158,377
Allowance for bad debts		11,945		37,242		13,998			41,419
Others		265,171		789,879		335,180			852,617

Total	W	4,426,125		12,916,618		4,479,457			12,790,302

(2)

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


(In millions of Korean won)	2024				2023
	Three-month		Nine-month		Three-month		Nine-month
Salaries & Wages	W	490,111		1,572,225		593,255		1,621,626
Post-employment benefits (defined benefit plan)		23,308		70,648		21,583		65,199
Post-employment benefits (defined contribution plan)		14,919		43,322		14,217		41,309
Share-based payment		1,751		3,489		1,759		8,495
Others		4,497		16,934		3,742		11,345

Total	W	534,586		1,706,618		634,556		1,747,974

KT Corporation

Notes to the Separate Interim Financial Statements

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

21.

Other Income and Other Expenses

(1)

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


(In millions of Korean won)	2024				2023
	Three- month		Nine- month		Three- month		Nine- month
Gain on disposal of property and equipment	W	8,721		31,000		5,766		17,976
Gain on disposal of right-of-use assets		525		2,084		318		1,968
Gain on disposal of intangible assets		—		99		—		—
Property and Equipment loss recovery income		40,712		106,312		36,501		106,349
Gain on disposal of investments in subsidiaries and associates		34,421		65,303		25,915		25,920
Dividends received		2,267		41,413		3,947		64,654
Income from government subsidies		9,102		23,309		8,394		25,753
Others		8,584		20,936		4,855		14,675

Total	W	104,332		290,456		85,696		257,295

(2)

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


(In millions of Korean won)	2024				2023
	Three- month		Nine- month		Three- month		Nine- month
Loss on disposal of property and equipment	W	10,702		43,260		17,996		47,767
Loss on disposal of right-of-use assets		148		1,421		179		1,095
Loss on disposal of intangible assets		415		7,532		1,692		4,687
Loss on disposal of investments in subsidiaries and associate		—		3,154		—		—
Donations		30		2,715		6,015		21,292
Others		28,680		68,084		31,835		94,887

Total	W	39,975		126,166		57,717		169,728

KT Corporation

Notes to the Separate Interim Financial Statements

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

22.

Financial Income and Costs

(1)

Details of financial income for the three- and nine-month periods ended September 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024					2023
	Three-month			Nine-month		Three-month		Nine-month
Interest income	W	53,152			166,925		54,288		159,297
Gain on foreign currency transactions		1,842			6,608		3,223		10,212
Gain on foreign currency translation		(3,355	)		15,712		1,185		11,638
Gain on derivative transactions		—			—		7,060		10,192
Gain on valuation of derivatives		(136,699	)		61,112		59,050		153,946
Gain on disposal of trade receivables		—			—		—		3,441
Dividends income		11,691			51,339		10,561		43,141
Gain on disposal of financial instruments		1,510			6,500		5,623		6,515
Gain on valuation of financial instruments		—			2,746		—		706
Reversal of other allowance for bad debts		—			—		2,279		2,279

Total	W	(71,859	)		310,942		143,269		401,367

(2)

Details of financial costs for the three- and nine-month periods ended September 30, 2024 and 2023, are as follows:


(In millions of Korean won)	2024					2023
	Three-month			Nine-month		Three-month		Nine-month
Interest expenses	W	61,807			200,368		63,926		206,514
Loss on foreign currency transactions		1,401			5,404		9,446		19,222
Loss on foreign currency translation		(142,285	)		62,865		61,287		159,111
Loss on derivative transactions		129			129		—		—
Loss on valuation of derivatives		(193	)		—		19		204
Loss on disposal of trade receivables		1,149			4,736		1,906		8,971
Loss on valuation of financial instruments		—			7,057		—		33,471
Loss on disposal of financial instruments		1,335			2,886		—		—

Total	W	(76,657	)		283,445		136,584		427,493

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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 23.8%.

24.

Earnings per Share

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

(1)

Basic Earnings per Share


	2024				2023
	Three-month		Nine-month		Three-month		Nine-month
Profit attributable to ordinary shares (In millions of Korean won)	W	309,792		978,323		210,569		835,489
Weighted average number of ordinary shares outstanding (In number of shares)		245,825,775		245,937,306		248,229,697		251,119,400

Basic earnings per share (In Korean won)	W	1,260		3,978		848		3,327

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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		Nine-month		Three-month		Nine-month
Profit attributable to ordinary shares (In millions of Korean won)	W	309,792		978,323		210,569		835,489
Diluted profit attributable to ordinary shares (In millions of Korean won)		309,792		978,323		210,569		835,489
Number of dilutive potential ordinary shares outstanding (In number of shares)		99,797		77,760		129,329		114,355
Weighted average number of ordinary shares outstanding (In number of shares)		245,925,572		246,015,066		248,359,026		251,233,755

Diluted earnings per share (In Korean won)	W	1,260		3,977		848		3,326

KT Corporation

Notes to the Separate Interim Financial Statements

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

25.

Cash Generated from Operations

(1)

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


(In millions of Korean won)	2024			2023
1. Profit for the period	W	978,323			835,489
2. Adjustments for:
Income tax expense		304,953			215,021
Interest income		(166,925	)		(159,297	)
Interest expense		200,368			205,307
Dividend income		(92,752	)		(107,795	)
Depreciation		1,841,237			1,775,138
Amortization of intangible assets		353,223			357,091
Depreciation of right-of-use assets		257,364			253,250
Provisions for severance benefits (defined benefits)		82,375			74,877
Impairment losses on trade receivables		53,909			60,604
Gain on disposal of investments in subsidiaries, associates and joint ventures		(62,149	)		(25,920	)
Loss on disposal of property and equipment		12,260			29,791
Loss on disposal of intangible assets		7,433			4,687
Gain on disposal of right-of-use assets		(663	)		(873	)
Loss on foreign currency translation		47,153			147,473
Gain on valuation and settlement of derivatives, net		(60,983	)		(146,883	)
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		(3,935	)		(1,310	)
Others		(13,331	)		7,843
3. Changes in operating assets and liabilities
Increase in trade receivables		(72,053	)		(229,958	)
Decrease in other receivables		29,573			11,586
Increase in other current assets		(109,274	)		(102,723	)
Decrease (Increase) in other non-current assets		5,958			(6,129	)
Decrease in inventories		126,381			89,463
Increase in trade payables		51,216			497,856
Increase (decrease) in other payables		(100,871	)		156,756
Decrease in other current liabilities		(65,116	)		(17,965	)
Decrease in other non-current liabilities		(6,712	)		(16,497	)
Increase (decrease) in provisions		(189	)		1,276
Increase (decrease) in deferred revenue		4,680			(14,122	)
Payment of post-employment benefits (defined benefits)		(234,439	)		(210,010	)
Decrease in plan assets		178,629			135,277

4. Cash generated from operations (1+2+3)	W	3,549,954			3,829,812

KT Corporation

Notes to the Separate Interim Financial Statements

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

(2)

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


(In millions of Korean won)	2024			2023
Reclassification of the current portion of borrowings	W	2,270,605			1,173,690
Reclassification of construction-in-progress to property and equipment		1,317,113			1,687,953
Change of other payables relating to acquisition of property and equipment		(57,780	)		(233,936	)
Change of other payables relating to acquisition of intangible assets		(272,955	)		(304,125	)
Reclassification of other payables from net defined benefit assets		(15,096	)		(13,742	)
Increase in financial assets due to stock exchange		52,841			—

KT Corporation

Notes to the Separate Interim Financial Statements

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

26.

Changes in Liabilities Arising from Financing Activities


(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			(475,338	)		—		61,699			—			4,768			7,151,062
Lease liabilities		851,610			(236,112	)		219,088		—			—			(41,693	)		792,893
Derivative liabilities		23,076			(855	)		—		—			—			(22,221	)		—
Derivative assets		(156,774	)		—			—		(59,494	)		(16,402	)		22,418			(210,252	)

Total	W	8,277,845			(712,305	)		219,088		2,205			(16,402	)		(36,728	)		7,733,703


(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			1,097			—		157,896			—		16,769			7,671,323
Lease liabilities		865,280			(238,972	)		233,361		—			—		(32,762	)		826,907
Derivative liabilities		32,402			—			—		204			1,752		(33,688	)		670
Derivative assets		(185,989	)		46,525			—		(152,675	)		37,448		23,496			(231,195	)

Total	W	8,207,254			(191,350	)		233,361		5,425			39,200		(26,185	)		8,267,705

KT Corporation

Notes to the Separate Interim Financial Statements

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

27.

Related Party Transactions

(1)

The list of related parties of the Company as of September 30, 2024, is as follows:


Relationship		Name of Entity
Subsidiaries		83 entities including KT Estate Inc., KT Skylife Co., Ltd., BC Card Co., Ltd.

Associates and joint ventures		51 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 September 30, 2024 is W 419,294 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 September 30, 2024 and 2023, and December 31, 2023

(4)

Outstanding balances of receivables and payables in relation to transaction with related parties as of September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024
	Receivables						Payables
	Trade receivables		Loans and others		Other receivables		Trade payables		Other payables		Lease liabilities
Subsidiaries
KT Linkus Co., Ltd.	W	5		—		—		—		11,577		—
KT Telecop Co., Ltd.		547		—		740		4,716		26,395		—
KTCS Corporation		45		—		6,987		—		55,102		4
KTIS Corporation		13,474		—		—		—		48,881		—
KT Service Bukbu Co., Ltd.		20		—		—		—		18,108		—
KT Service Nambu Co., Ltd.		—		—		1		—		22,676		—
KT Skylife Co., Ltd.		23,453		—		8,966		1,105		14,559		—
KTDS Co., Ltd.		814		—		3,365		—		124,906		—
KT Estate Inc.		611		—		41,881		—		8,842		6,447
Skylife TV Co., Ltd.		1,982		—		—		—		2,426		—
BC Card Co., Ltd. ¹		563		—		8,502		—		6,359		5
KT Sat Co., Ltd.		1,112		—		—		—		1,288		—
KT Alpha Co., Ltd.		6,349		—		20		2,063		7,029		—
KT Commerce Inc.		14		—		83		1,419		18,071		3,475
KT M&S Co., Ltd.		124		4,900		312		—		63,260		—
GENIE Music Corporation		—		—		18,364		—		23,010		—
KT M Mobile Co., Ltd.		51,196		—		176		—		1,650		—
Nasmedia, Inc.		2,176		—		—		—		203		—
KT MOS Bukbu Co., Ltd.		41		—		7		—		11,917		—
KT MOS Nambu Co., Ltd.		—		—		79		—		12,674		—
KT Engineering Co., Ltd		219		—		1,637		207		41,132		—
KT Studio Genie Co., Ltd.		12		—		1,379		—		33,995		—
kt cloud Co., Ltd.		14,022		—		3,127		—		40,306		33
East Telecom LLC		5,199		13,482		—		80		—		—
Others		13,076		—		7,524		2,837		11,918		18
Associates and joint ventures
K Bank Inc.		507		—		2,605		—		1		—
Others		981		—		5		—		9,831		1,089
Others
Others		5		—		—		—		—		—

Total	W	136,547		18,382		105,760		12,427		616,116		11,071

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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 September 30, 2024, the unsettled amount of W 6,307 million (December 31, 2023: W 1,002 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 September 30, 2024 and 2023, and December 31, 2023

(5)

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


(In millions of Korean won)	2024
	Sales				Purchases				Acquisition of right-of- use assets		Finance income		Finance costs		Dividends received
	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	4,093		12		44,284		71		1		—		—		—
KT Telecop Co., Ltd.¹		5,595		—		105,535		10		—		3		—		—
KTCS Corporation		68,763		4		259,402		1		1		—		—		318
KTIS Corporation¹		54,441		127		250,884		849		—		—		—		1,224
KT Service Bukbu Co., Ltd.¹		9,293		—		158,184		1,515		—		—		—		—
KT Service Nambu Co., Ltd.¹		11,289		—		195,587		2,139		—		—		—		—
KT Skylife Co., Ltd.¹		107,248		6		14,240		50		—		—		—		8,368
KTDS Co., Ltd.¹		10,236		—		329,017		41,033		—		1		—		4,848
KT Estate Inc.¹		41,878		11		60,523		1,116		24,475		—		463		8,600
Skylife TV Co., Ltd.		11,142		—		9,418		—		—		—		—		—
BC Card Co., Ltd.		7,139		—		21,804		—		5		2		—		4,589
KT Sat Co., Ltd.		5,535		—		8,562		—		—		—		—		—
KT Alpha Co., Ltd.		46,621		—		33,172		—		—		2		—		—
KT Commerce Inc.¹		899		—		59,461		82,863		3,682		—		78		—
KT M&S Co., Ltd.		258,329		24		207,083		—		—		—		—		—
GENIE Music Corporation		300		—		42,116		—		—		—		—		—
KT M Mobile Co., Ltd.		192,555		92		2,543		—		—		—		—		—
Nasmedia, Co., Ltd.		209		2		2,197		—		—		—		—		3,487
KT MOS Nambu Co., Ltd.¹		1,441		—		69,661		4,903		—		—		—		—
KT MOS Bukbu Co., Ltd.¹		2,331		—		69,028		4,993		—		—		—		—
KT Engineering Co., Ltd.¹		1,769		—		28,193		99,316		—		—		—		—
KHS Corporation		12		—		5,615		—		—		—		—		—
KT Studio Genie Co., Ltd.¹		123		—		5,118		50,300		—		—		—		—
kt cloud Co., Ltd.¹		73,085		—		113,396		259		1		1		5		—
Others ²		28,645		355		79,222		287		11		2		1		5,855
Associates and joint ventures
K Bank Inc.		4,096		—		110		—		—		918		—		—
Others ³		2,943		—		8,510		—		14		—		39		4,124
Others
Others		31		4		—		—		—		—		—		—

Total	W	950,041		637		2,182,865		289,705		28,190		929		586		41,413

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

²	Transactions with Lolab Co., Ltd. before it was excluded from subsidiaries are included.

³	Transactions with LS Marine Solution Co., Ltd. and QTT Global (Group) Company Ltd. before they were excluded from associates and joint ventures are included.

KT Corporation

Notes to the Separate Interim Financial Statements

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


(In millions of Korean won)	2023
	Sales				Purchases				Acquisition of right-of- use assets		Finance income		Finance costs		Dividends received
	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	4,770		1		45,485		—		1		—		—		—
KT Telecop Co., Ltd. ¹		4,958		33		106,990		20		—		8		—		—
KTCS Corporation		62,868		7		258,544		1		—		—		—		381
KTIS Corporation		53,931		41		248,380		—		—		—		—		1,224
KT Service Bukbu Co., Ltd.		10,822		—		167,783		—		—		—		—		—
KT Service Nambu Co., Ltd. ¹		10,961		—		195,718		157		—		—		—		—
KT Skylife Co., Ltd.		91,399		15		17,103		—		—		—		—		8,368
KTDS Co., Ltd.		9,380		—		344,005		—		—		1		—		7,560
KT Estate Inc. ¹		39,902		22		61,956		1,619		24,454		—		554		17,500
Skylife TV Co., Ltd.		6,704		—		8,653		—		—		—		—		—
BC Card Co., Ltd.		7,209		14		24,757		—		—		4		—		11,320
KT Sat Co., Ltd.		5,904		—		8,195		—		—		—		—		7,000
KT Alpha Co., Ltd.		47,358		—		28,219		—		—		1		—		—
KT Commerce Inc. ¹		974		—		67,705		62,620		—		—		—		—
KT M&S Co., Ltd.		234,583		30		200,420		—		—		—		—		—
GENIE Music Corporation		274		—		40,385		—		—		—		—		—
KT M Mobile Co., Ltd.		162,942		48		5,097		—		—		—		—		—
Nasmedia, Co., Ltd.		350		—		3,014		—		—		—		—		3,170
KT MOS Nambu Co., Ltd.		1,393		—		71,904		—		—		—		—		—
KT MOS Bukbu Co., Ltd.		2,120		—		72,093		—		—		—		—		—
KT Engineering Co., Ltd. ¹		597		—		23,166		78,140		—		—		—		—
KHS Corporation		3		—		6,141		—		—		—		—		—
KT Studio Genie Co., Ltd. ¹		87		—		13,708		67,923		—		—		—		—
kt cloud Co., Ltd. ¹		71,526		—		99,995		6,128		776		—		11		—
Others ^{2 3 4}		20,176		9		64,004		—		10		2		1		6,992
Associates and joint ventures
K Bank Inc.		2,174		—		115		—		—		2,283		—		—
Others ⁵		993		100		4,020		—		19		—		61		1,139

Total	W	854,358		320		2,187,555		216,608		25,260		2,299		627		64,654

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

²	Transactions with KT Strategic Investment Fund No.2 before it was excluded from subsidiaries are included.

³	Transactions with LS Marine Solution Co., Ltd. before it was classified as associates and joint ventures are included.

⁴	Transactions with KT-Michigan Global Contents Fund before it was excluded from subsidiaries are included.

⁵	Transactions with KT living Inc. (formerly KD living Inc.) before it was classified as a subsidiary are included.

KT Corporation

Notes to the Separate Interim Financial Statements

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

(6)

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


(In millions of Korean won)	2024		2023
Short-term benefits	W	1,224		1,089
Post-employment benefits		145		71
Stock-based compensation		883		321

Total	W	2,252		1,481

(7)

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


(In millions of Korean won)	2024
	Loan transactions				Borrowing transactions¹				Equity contributions in cash and others
	Loans		Collections		Borrowings		Repayments		Equity contributions in cash and others
Subsidiaries
KT M&S Co., Ltd.	W	44,100		47,600		—		—		—
KT Estate Inc.		—		—		—		18,881		—
KT ES Pte. Ltd.		—		—		—		—		68,270
Others		—		—		3,682		514		(2,817	)
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		—		—		—		295		1,985

Total	W	44,100		47,600		3,682		19,690		123,459

¹	Borrowing transactions include lease 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 September 30, 2024 and 2023, and December 31, 2023


(In millions of Korean won)	2023
	Loan transactions				Borrowing transactions¹				Equity contributions in cash and others
	Loans		Collections		Borrowings		Repayments		Equity contributions in cash and others
Subsidiaries
KT M&S Co., Ltd.	W	44,100		47,600		—		—		—
KT Estate Inc.		—		—		29		18,948		—
KT HEALTHCARE VINA COMPANY LIMITED		—		—		—		—		13,001
Others ²		1,637		—		—		612		(19,100	)
Associates and joint ventures
Telco Credit Bureau Co., Ltd.		—		—		—		—		6,500
KT-IBKC Future Investment Fund 1		—		—		—		—		(1,820	)
Others Investment Association		—		—		—		289		4,215

Total	W	45,737		47,600		29		19,849		2,796

¹	Borrowing transactions include lease transactions

²	Transactions with KT Strategic Investment Fund No.2 before it was excluded from subsidiaries are included.

(8)

As of September 30, 2024, the Company has entered into a credit card agreement with a limit of W16,477 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 other entities according to the agreement. As of September 30, 2024, the Company is planning to make an additional investment of W51,735 million.

KT Corporation

Notes to the Separate Interim Financial Statements

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

28.

Fair Value

During the period ended September 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 amount and fair value of financial instruments by category as of September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024				December 31, 2023
	Carrying amount		Fair value		Carrying amount		Fair value
Financial assets
Cash and cash equivalents	W	1,608,691		¹		1,242,005		¹
Trade and other receivables
Financial assets measured at amortized cost ²		3,293,349		¹		3,444,788		¹
Financial assets at fair value through other comprehensive income		260,525		260,525		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		501,511		501,511		441,321		441,321
Financial assets at fair value through other comprehensive income		1,654,368		1,654,368		1,437,684		1,437,684
Derivative financial assets for hedging purpose		210,252		210,252		156,774		156,774

Total	W	7,609,161				7,216,766

Financial liabilities
Trade and other payables	W	4,276,120		¹		4,659,037		¹
Borrowings		7,151,062		7,070,648		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		—		—		23,076		23,076

Total	W	11,428,585				12,243,449

¹	The Company did not conduct fair value estimation as the book amount is a reasonable approximation of the fair value.

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 September 30, 2024 and 2023, and December 31, 2023

(2)

Fair Value Hierarchy

Financial instruments that are measured at fair value are categorized by 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 September 30, 2024 and December 31, 2023, are as follows:


(In millions of Korean won)	September 30, 2024
	Level 1		Level 2		Level 3		Total
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	W	—		260,525		—		260,525
Other financial assets
Financial assets at fair value through profit or loss		—		—		501,511		501,511
Financial assets at fair value through other comprehensive income		1,453,179		—		201,189		1,654,368
Derivative financial assets for hedging		—		210,252		—		210,252

Total	W	1,453,179		470,777		702,700		2,626,656

Liabilities
Borrowings	W	—		7,070,648		—		7,070,648
Other financial liabilities
Financial assets at fair value through profit or loss		—		—		1,403		1,403

Total	W	—		7,070,648		1,403		7,072,051

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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 September 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 nine-month periods ended September 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		15,366			—		—
Transfer		48,645			—		—
Disposal		(13,140	)		—		—
Amount recognized in profit or loss		9,319			—		—

Ending balance	W	501,511			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		23,386			10,267			—
Transfer		—			(2,384	)		(5,205	)
Disposal		(1,385	)		(6	)		—
Amount recognized in profit or loss		(20,643	)		—			4,274

Ending balance	W	411,746			206,330			4,233

KT Corporation

Notes to the Separate Interim Financial Statements

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

(4)

Valuation Techniques and Inputs

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


(In millions of Korean won)	September 30, 2024
	Fair value		Level	Valuation techniques
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	W	260,525	2	DCF Model
Other financial assets
Financial assets at fair value through profit or loss		501,511	3	DCF Model, Adjusted Net Asset Model, Binomial Option Pricing Model
Financial assets at fair value through other comprehensive income		201,189	3	Market Approach Model
Derivative financial assets for hedging		210,252	2	DCF Model
Liabilities
Borrowings	W	7,070,648	2	DCF Model
Other financial liabilities
Financial assets at fair value through profit or loss		1,403	3	Binomial Option Pricing Model

KT Corporation

Notes to the Separate Interim Financial Statements

As of September 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	W	116,198	2	DCF Model
Other financial assets
Financial assets at fair value through profit or loss		441,321	3	DCF Model, Adjusted Net Asset Model, Binomial Option Pricing Model, Monte Carlo Simulation
Financial assets at fair value through other comprehensive income		201,189	3	Market Approach Model
Derivative financial assets for hedging		156,774	2	DCF Model
Liabilities
Borrowings	W	7,328,734	2	DCF Model
Other financial liabilities
Financial assets at fair value through profit or loss		1,403	3	Binomial Option Pricing Model
Derivative financial liabilities for hedging		23,077	2	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 discuss 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 September 30, 2024 and 2023, and December 31, 2023

29.

Events After the Reporting Period

(1)

The Company has issued a debenture since the end of the reporting period, and the details are as follows.


(In thousands of foreign currencies)
Type	Issue date	Foreign currency	Annual interest rates	Maturity
Global 2024	Oct. 02, 2024	USD 500,000	4.125%	Feb. 02, 2028

(2)

The Company has decided on a quarterly dividend at the Board of Directors dated October 15, 2024, and the details are as follows.


Type		Details
Dividend per share		W 500 (Total dividend: W 122,913 million)
Dividend yield		1.2%
Dividend report date		September 30, 2024
Dividend pay date		October 31, 2024

(3)

The Company has implemented a special voluntary retirement system on November 8, 2024, for employees with over 15 years of continuous service. Furthermore, the construction and maintenance of network infrastructure, including tracks and power supply, will be transferred to a newly established subsidiary in January 2025.

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

26/11/2024 11:07am

Edgar (US Regulatory)