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Korea Electric Power Corporation (NYSE:KEP)

Q3 2013 Earnings Conference Call

November 12, 2013 2:30 AM ET

Executives

Chang-Keun Shin – Vice President and Treasurer

Changyoung Ji – Senior Manager of Investor Relations

Analysts

Yoo Deok-sang – Dongbu Securities Co. Ltd.

Pierre Lau – Citigroup Inc.

Shin Ji Yoon – KTB Investment & Securities

Geoffrey Boyd – CLSA

Operator

[Foreign Language]

Good morning and good evening, first of all thank you all for joining this conference call and now we’ll begin the conference of the fiscal year 2013 Third Quarter Earnings Results by KEPCO.

This conference will start with a presentation, followed by a brief Q&A session. (Operator Instructions). Now we shall commence the presentation on the fiscal year 2013 third quarter earnings results by KEPCO.

Chang-Keun Shin

[Foreign Language]

Good afternoon. This is Chang-Keun Shin, Vice President and Treasurer of KEPCO. On behalf of KEPCO, I would like to thank you all for participating in today’s conference call to announce earnings results for the third quarter of 2013.

[Foreign Language]

We will begin with a brief presentation on the earnings results, which will be followed by a Q&A session. Today’s call will be proceeded in both Korean and English.

[Foreign Language]

Please note that the financial information to be disclosed today is only preliminary, unaudited, and unconsolidated basis in accordance with KIFRS. Any comparison will be on a year-on-year basis between 2012 and 2013. Business, strategies, plans, financial estimates, and other forward-looking statements included in today’s call will be made based on our current expectations and plans. Please be noted that such statements may involve certain risks and uncertainties.

[Foreign Language]

Now Senior IR Manager Changyoung Ji will begin with an overview of earnings results of the third quarter of 2013, first in Korean and repeated in English.

[Foreign Language]

Now we will provide you with English starting with operating income, in the third quarter of 2013 KEPCO reported a net operating income of KRW1.11 trillion, thinking of closely operating revenues increased 9.3% to KRW39.76 trillion this was attributable mainly to 9.3% increase in power sales revenue, totaling in KRW37.04 trillion and 7.4% increase in revenue from the overseas business amounting to KRW1.69 trillion.

Moving on to main operating cost, cost of goods sold, SG&A expenses increased 5.1% to KRW38.65 trillion. Fuel cost increased 0.9% to KRW18.11 trillion, power generation affected by power demand increase 0.4% [ph] and unit cost of fuel declined by 5%.

Slight increase of total fuel cost was mainly due to the reclassification of account receivables on the fuel cost of 2012. Meanwhile, purchased power cost increased 11.9% to KRW8.17 trillion while unit cost of fuel declined 4.3%, purchase volume increased 8.9% and the reclassification of account receivables on the purchased power cost of 2012 and our recent purchase cost increase.

Depreciation cost rose 4% to KRW4.86 trillion mainly due to seven newly constructed power plants such as Incheon number 3, Shin-Kori number 2, Shin-Wolsong number 1, [indiscernible] 5 and 6.

Now let me explain KEPCO’s non-operating segment. Net financial loss stood at KRW1.69 trillion in 2013, which was KRW232 billion. This was mainly due to weakened Korean Won resulting in the decrease of a translation gain. This was also recorded by we recorded consolidated net loss of KRW455 billion in the third quarter of 2013. This concludes the overview of KEPCO’s earnings results for the third quarter of 2013.

[Foreign Language]

Now let me move on to the Q&A session. Q&A session will be hosted by Mr. Changyoung Ji.

Changyoung Ji

[Foreign Language]

This is Changyoung Ji. I’m joined with our IR committee members in charge of major business at KEPCO. We are prepared to take any questions.

[Foreign Language]

Since we will proceed in both Korean and English, all the questions made will be translated. Please make sure your questions and answers are brief and clear.

[Foreign Language]

Please begin.

Question-and-Answer Session

Operator

[Foreign Language]

Now Q&A session will begin (Operator Instructions).

[Foreign Language]

Currently five participants are waiting with their questions. The first question will be given by Mr. Yoo Deok-sang from Dongbu Securities. Please go ahead sir.

Yoo Deok-sang – Dongbu Securities Co. Ltd.

[Foreign Language]

I have three questions from Dongbu Securities. The first question is for the fourth quarter of this year, the forecast that you have shown us for the utilization of nuclear power is 82.9%. Is this reflecting the fact that you forecast the cable system replacement to take place within the month of November, so that reoperation of the closed nuclear power plants will take place? So do you believe that these will be in operation and that will be reflected in the 82.9% that was in your forecast?

The second question is regarding utilization of coal among the fuel mix. It was 97% in the first quarter, but in your forecast it is reduced to 85% for the fourth quarter. Could you elaborate on the trend that you see going forward in terms of the coal portion within the overall fuel mix? Third question is could you give us a breakdown of the KRW46.8 billion, which is included in the item of losses and gains per share?

Chang-Keun Shin

[Foreign Language]

Allow me to answer your first question, regarding the utilization rate of the nuclear power plant. For the fourth quarter, it is at 81.9% and this is under the assumption that by the end of November, all three units that have been installed in operation will be re-entering operation, so the 81.9% figure is including those three units.

[Foreign Language]

And I would like to answer your second question regarding coal utilization rate of 85% for the fourth quarter. This is due the fact that as we go more or less into the lower season, we expect the coal higher the top plans to go into preventive maintenance activity. So that is the source of that reduction and this is the interpreter, I would like to make a correction for the third question. Third question was elaboration on the breakdown of the KRW46.8 billion, which was included in the gains and losses from affiliates.

[Foreign Language]

I would like to answer that question, the third question. This is mostly due to the lowering of coal prices for the Bayan Resources of Indonesia and [indiscernible]. They have experienced coal price lowering and decrease and this is what has contributed to that loss.

[Foreign Language]

Yoo Deok-sang – Dongbu Securities Co. Ltd.

[Foreign Language]

Yes, I would like to ask add on question to the first one. I would like to ask what remains as the procedures before the full operation of the currently stalled nuclear power plant. And secondly once they go into operation once again, what is the expected overall running rate to operation rate of the nuclear power plant?

Chang-Keun Shin

[Foreign Language]

Yes I’d like to give you some information on the current situation, as you are probably well aware. The LS Cable’s LOCA test is under review right now, it is being conducted right now we expect that the Safety Commission will come to a final closing of that test review by the end of this year.

[Foreign Language]

But regardless of the actual timing of when the test review will be ended we have made these expectations and forecasts based on the assumption that by the end of November, these nuclear power plants will go back into operation.

Operator

[Foreign Language]

The following question is by Pierre Lau from City Bank. Please go ahead, sir.

Pierre Lau – Citigroup Inc.

Hello management, this is Pierre Lau from Citigroup. I have three questions. The first one is about your revenue. In the third quarter this year you have revenue adjustment of a positive number, KRW122 billion, is down 70% year-on-year. So I would like to know why the adjustment amount has reduced so much in the third quarter, and what would be the expectation of that amount in the fourth quarter in 2013? That’s the first question.

The second question is about your unit oil costs. The unit oil costs in third quarter was KRW1311 per liter, it increased by 51% year-on-year, and also increased by more than 50% quarter-on-quarter compared to second quarter. So I would like to know, given that oil price has not increased so much in recent months, why the unit oil costs increased a lot for our Company?

And the last question is about your coal-fired power plant maintenance. You just said that we are going to have more repair and maintenance in the fourth quarter which you claim should be a low season. I look at the coal-fired power plant utilizations in fourth quarter in previous year. Usually the utilization were higher than 90% or even higher than 95%. Why we have more coal-fired power plant maintenance in fourth quarter this year compared to fourth quarter in previous year? Thank you.

Chang-Keun Shin

[Foreign Language]

I would like to answer the first question. If I may explain, there is a transition process that takes place from the meter-measured based electricity sold versus the actual electricity sold. So what happens is that the portion that was included in the January portion will actually be recalculated to take out the portion for December, and then on that we add the September period unmetered revenue into this portion.

However, when we take out the December amount because the unit cost for the December revenue is much higher and also the actual amount of electricity sold is higher because it is the winter season, the portion that is deducted out is much greater. First is the September portion, which is usually at a lower unit price of the spring and autumn period seasonal price and also the amount itself or the volume itself is lower. This has caused this gap of KRW470 billion to take place.

However, this phenomena will be corrected when we actually go into a similar conversion rate later in the year, and later in the year, because it is all going to be the same unit price of winter prices. We will not see this discrepancy.

And when we see what has happened compared to the previous year, it is not that bigger. So at the end of the quarter, we will see that the minus portion will become translated into a plus portion. And actually, for your comparison in 2011 there was about KRW100 billion of this GAAP amount, which was still bigger and for the year 2012 that figure was KRW180 billion.

[Foreign Language]

For the second question, I would like to make a correction in our materials because there has been a typo which has brought about this error in calculations. If you look at the table that includes the fuel cost, the Bankasi volumes should not be KRW2.15 million that you see there, but it should be KRW2.51 million. In that case, recalculating that, the unit price will be lowered from the current KRW1100 or so level to KRW793.

So once again, I would like to ask for your understanding and I would like to ask that this correction be made in the typo. So in your materials for 2013 January to September, Bankasi, that amount should be corrected to KRW2.514 and that will make the unit price KRW793.6?

Chang-Keun Shin

[Foreign Language]

I would like to answer your third question. As mentioned earlier, in principle and in general compared to the third quarter, in the fourth quarter there are more maintenance activities that take place and therefore this has an influence on the overall utilization rate.

But if you look at this rate compared to the previous year’s fourth quarter there is about a 10% dip. We expect that all of this is mainly due to the preventive maintenance plans that were put forward by the power exchange. However, there maybe some additional factors that have translated into this difference. So we would like to follow-up with some additional details after we find out what the elements were.

Pierre Lau – Citigroup Inc.

[Foreign Language]

Thanks you management for your answer. Can I have a follow up question is that for the Bankasi volume and unit cost could you also give us the tool number for third quarter in 2013? Thank you.

Chang-Keun Shin

[Foreign Language]

Yes thank you for that question I would like to answer that question for just a third quarter of 2013 the volume is KRW882,000 and the unit price is KRW776.2.

Pierre Lau – Citigroup Inc.

Thank you very much.

[Foreign Language]

Operator

The following question is by [Indiscernible] from Korea Investment and Securities, please go ahead sir.

[Foreign Language]

Unidentified Analyst

Yes I have a question regarding the data that you have given us on the excel spreadsheet, I’m looking at the page that has only the third quarter data only and there if you look at the other expenses, we see that the other expenses totaling up to KRW2.87 to KRW1 trillion which compares to the same quarter of the previous year is an increase of about KRW380 billion in terms of what constitutes the other expenses, I expect that labor cost takes up about 50% of this but could you elaborate further on what has contributed to this increase in other expenses?

Chang-Keun Shin

[Foreign Language]

Yes I would like to answer your question actually the main factors behind the increase in other expenses is not labor cost because actually labor cost has decreased by about KRW40 billion however most of the increase in other expenses due to the related cost about decommissioning of nuclear power plant and REC purchase which has began from last year.

[Foreign Language]

In that case I would like to add two additional questions regarding this factor for your reserves for the commissioning cost, last year already there has been quite a bit of amount that was put into this category about KRW600 billion in total and even this year for every quarter we see that about KRW30 billion has been put aside for this, there seems to be increasing.

So I would like to ask what is the reason behind increasing this portion and also the second question is I remember that during the national assembly inquiries there has been some remarks about how most of this amount was reserved for dealing with medium and low level radioactive waves treatment but there hasn’t been much reserved for dealing with high level of radioactive ways, so has that kind of comments been reflected in your future plans, could you elaborate on that?

[Foreign Language]

To answer your question, for last year there was a big increase in this amount and this was mostly due to the fact that the unit cost put forward or announced by the then Ministry of Knowledge which is currently the Ministry of Industry right now that change in the unit cost that was published by the Ministry reflect was reflected in that increase in the amount as for this year it was mostly due to new going in actions such as Shin-Kori number 2 and Shin-Wolsong number 1.

[Foreign Language]

As for your second question we would like to follow up later with some additional details after reviewing the details.

[Foreign Language]

Operator

The following question is by Mr. Shin Ji-Yoon from KTB Investment & Securities. Please go ahead sir.

Shin Ji Yoon – KTB Investment & Securities

[Foreign Language]

Yes, I have three questions. The first one is similar to the question that was asked by the previous person regarding the decommissioning cost reserve compared to last year. So what is the amount that you expect this portion to take up for the fourth quarter of this year? Could you clarify that figure?

And secondly, the second question that I have is regarding coal unit cost. For the fuel cost segment for the third quarter, you have reflected a unit cost for coal of about $86 per ton. But I had asked a similar question regarding the coal unit price back in the first half of earnings result conference call and at the time when I had asked for a forecast figure for the second half of the year, the answer that I had received at the time was at around $94 per ton.

So do you believe that this is a temporary trend, that $86 that you show, or do you believe that this will be maintained in the fourth quarter and also for next year as well? So do you believe that this is a realistic figure of $86 per ton that was reflected?

The last question is I’m not sure if you will be able to clearly state anything during this conference call. But for Shin-Kori number 3 and number 4, I would like to inquire about the actual opening dates or the end of construction dates for these two power plants. It was originally expected to be completed in September of next year, but there has been some press reports about maybe a delay of one to two years or so. KEPCO has until now mentioned that it will be possible to conclude the construction on time, so could you clarify this point?

Chang-Keun Shin

[Foreign Language]

I would like to answer your first question. We believe that due to the issues that I mentioned earlier about the Ministry’s notified unit price, which was normally high last year. That is probably why the reserve amount was that big last year. We believe that this year figure will be the normal rate.

[Foreign Language]

I would like to answer your second question regarding the coal unit price. Currently if you look at the prices in the international market despite prices at around $85, however the F4 amount that the generation companies have actually paid is higher than that because it was purchased with long-term contract, these long-term contracts were concluded at around the price level of $94 to $95, so in reality that price level is being maintained. Of course things will change once these long-term contracts volume are depleted and that will be reflected and also the additional purchase contract that are entered this year will be done at a lower part. So that will also be reflected later on in the unit price.

[Foreign Language]

In fact I would like to answer the third question. As you all know initial schedule was that Shin-Kori number 3 will enter into commercial operation at the end of 2013 and for Shin-Kori number 4 the expected date was September of next year 2014. However due to issues regarding the government permit and the permit given by the government there has been some delays there and for that reason Shin-Kori number 3 was expected to be delayed in terms of its opening to first half of next year.

At that point in time, there was also the cable issue that arose and therefore there have been more delayed factors that entered into the scene. Therefore currently what we expect is that Shin-Kori number 3 will go into operation from end of 2014 and Shin-Kori number 4 will go into operations in first half of 2015 which is the year after.

[Foreign Language]

For your reference what we just mentioned now the schedule that we mentioned now was based on recent reports in the press of what the government has stated to be the next schedule.

Operator

[Foreign Language]

The following question is by Mr. Geoffrey Boyd from CLSA. Please go ahead sir.

Geoffrey Boyd – CLSA

Great, yeah thanks for taking my questions. I mean I just want to get a clarification on a few things. I still was quite uncertain about the nuclear amortization issue because last year you did have KRW600 billion charge at the end of the year in the fourth quarter.

So I’m just trying to figure out will there be – you’re saying that there won’t be as much of a charge this year in the fourth quarter but how much will there be? So that’s my first question. And then the second question is just on the maintenance costs. I don’t know if this was asked there I didn’t quite catch it. But it seems like there’s only KRW185 billion in that third quarter versus KRW500 billion in the second quarter, it was down 31% year-on-year.

So it looks quite light and I’m just wondering why it was down so much and should we see a big increase in the fourth quarter? That’s question number two. And then just question number three just in general like are you able to give any full year guidance for this year and next year on what you’re expecting for fuel cost? Or power purchase costs? Maybe you have some numbers for this year and maybe you don’t have numbers for next year, I’m not sure but that would be good if you do. Thanks.

Chang-Keun Shin

[Foreign Language]

Yes I try to answer your first question, for the fourth quarter of this year it is not easy to predict or give you some estimates about the exact figure however we believe it will be similar to the third quarter figure.

[Foreign Language]

If I may add on the answer the reason behind a big jump in fourth quarter of last year as I mentioned earlier was due to the increase that of unit cost that was notified by the Ministry and that was applied back to the first, second and third quarter figures and it was all collected in the fourth quarter and that is why there was a huge lead. However for this year for each of the quarter there wasn’t much of a big difference in terms of the unit cost and therefore we don’t expect to see a big change in the fourth quarter.

Geoffrey Boyd – CLSA

Okay.

Chang-Keun Shin

[Foreign Language]

For your second question regarding maintenance cost and what is the reason behind the decrease for third quarter and do we expect to see an increase of this figure for the fourth quarter? For this question we would like to get back to you with some detail figures and information later.

Geoffrey Boyd – CLSA

Okay.

Chang-Keun Shin

[Foreign Language] For your third question, actually this is a very tricky question and we have to be a very careful in approaching this question, because it will all depend on what kind of assumptions we make. But let me go ahead and answer that question.

[Foreign Language]

Under the assumption that the oil price levels will be at around $103 per barrel and the exchange rate, under the assumption that the exchange rate is going to be KRW1116 to the dollar. With those assumptions we expect fuel costs to be KRW24 trillion and purchase power costs to be KRW11.7 trillion.

Geoffrey Boyd – CLSA

That’s for this year or next year?

Chang-Keun Shin

For this year.

Geoffrey Boyd – CLSA

For this year, okay.

Chang-Keun Shin

Okay.

Geoffrey Boyd – CLSA

KRW24 trillion exactly, was it?

Chang-Keun Shin

KRW23.7 trillion were actually.

Geoffrey Boyd – CLSA

Okay, KRW23.7 trillion, okay. Yeah, that’s good, thank you. [Foreign Language]

Operator

[Foreign Language]

Currently one participant is waiting with question. The following question is by Mr. Shin Ji Yoon from KTB Investment & Securities. Please go ahead, sir.

Shin Ji Yoon – KTB Investment & Securities

[Foreign Language]

Yes, I have three questions. First of all regarding accounts receivable for the three months, July, August and September, could you give us figures on what you have for those? And the second question is regarding the KEPCO headquarters site in Samseong-dong of Seoul.

What is the actual value that has been estimated for this site and when did it go into reevaluation for the real estate price level, and the third question is maybe this is a basic question that I’m not fully aware so I wanted to clarify once again, when you calculate the utilization rate of nuclear power plant what when the percentage is calculated what goes into the total figure because I understand that there are the portions for nuclear power plant that are in operation, that are in maintenance or suspended in operation so which part actually is entered into the calculation?

Chang-Keun Shin

[Foreign Language]

Yes I would like to answer your first question regarding the accounts receivable that has been delayed with the Fuel Cost Adjustment System linkage. For the three months that you’ve mentioned July, August and September it is up to KRW180 billion which means that for the nine months of 2013 starting from January that amount will be KRW1 trillion at the end of last year, the total amount was KRW1.8 trillion, so that means that KRW0.8 trillion remains.

[Foreign Language]

Regarding your second question the reevaluation for the Samseong-dong site took place in 2010, and it was KRW2.079 trillion and the current book to value is KRW2.073 trillion.

[Foreign Language]

Yes, I would like to answer your third question and for any additional details, please contact us later in terms of calculating the utilization rate it is the base megawatt of production multiplied by the operating hours, and that is divided by the actual produced power in terms of megawatt per hour.

[Foreign Language]

Operator

The following question is by Mr. Pierre Lau from Citigroup. Please go ahead sir.

Pierre Lau – Citigroup Inc.

Hi, management I have one questions. Would you mind letting us know, what is the key reason for the delay commissioning of our Shin-Kori unit 3 and unit 4? Thank you.

Chang-Keun Shin

[Foreign Language]

There are two major reasons behind the situation first one is that there has been some administrative delays due to the overall permit giving prospects by the government, the second reason is that you have probably heard about the current situation with the control cable issue due to the possibility of faulty control cable being installed they have all been taken out and being replaced with new ones and this is creating the delay.

Pierre Lau – Citigroup Inc.

Okay. Thank you.

Chang-Keun Shin

[Foreign Language]

Operator

Three participants are waiting with their questions. The following question is by [indiscernible]. Please go ahead sir.

[Foreign Language]

Unidentified Analyst

Yes I have two questions regarding CapEx. First of all I believe that for 2013 there has been an estimated amount of KRW18 trillion that is going to be put into these types of investments and among that KRW10 trillion has already been deployed which means that about 50% of that has been utilized. So how much do you expect for CapEx for fourth quarter of this year and will there be any connection to possible commissioning for Shin-Kori number 6 and – number 5 and number 6.

The next question is there will probably be soon the announcement regarding the National Energy Plan, regarding this will there be any changes in your CapEx plans? What kind of guidelines could you introduce to us or share with us regarding that fact?

Chang-Keun Shin

[Foreign Language]

I would like to answer your first question as you mentioned already by the end of September, our figures show that a CapEx of about KRW10.9 trillion has already been executed, but usually the annual CapEx has executed about 75% to 80% of the budget. So we believe that the fourth quarter amount will be somewhere around KRW3 trillion to KRW4 trillion level and there is no direct linkage to this CapEx figures with Shin-Kori 5 or 6.

[Foreign Language]

Regarding your second question but we would have to wait to see what is included in the national energy basic plan. So we are awaiting that trend to be coming out, and in terms of having any effect on our CapEx for this year, well I don’t think that it will have any effect on the current CapEx plan but we would have to take into consideration what is included in this national energy basic plan for the next CapEx plans.

Unidentified Analyst

[Foreign Language]

Yes, I have one additional question, between the timeline of commercial operations entry for Shin-Kori number 3 and number 4, there is also Shin-Wolsong number 2. So do you have an expected date of Shin-Kori number 2?

Chang-Keun Shin

[Foreign Language]

Shin-Wolsong number 2 is expected to go into commercial operation from first half of next year.

[Foreign Language]

Operator

[Foreign Language]

The following question is by Yoo Deok-sang from Dongbu Securities. Please go ahead sir.

Yoo Deok-sang – Dongbu Securities Co. Ltd.

[Foreign Language]

I would like to ask a question regarding the interest rate if you look at the interest expense it seems that it has been reduced a little bit, so could you give us some current figures and forecasts about the actual interest rate for the borrowings that you have right now.

Chang-Keun Shin

[Foreign Language]

In terms of interest rate – capitalization rate, it will be maintained at about 24 percentage level.

[Foreign Language]

And the average interest rate for borrowing as of September was 1.15%.

Yoo Deok-sang – Dongbu Securities Co. Ltd.

[Foreign Language]

What about forecast?

Chang-Keun Shin

[Foreign Language]

The 4.16 interest rate that I mentioned earlier is an average of the whole year. For the first half of this year was at around 3% and in the second half it was somewhere around 3.6%.

[Foreign Language]

So we expect the interest rate to continue to rise.

Yoo Deok-sang – Dongbu Securities Co. Ltd.

[Foreign Language]

Operator

[Foreign Language]

The following question is by Mr. [indiscernible]. Please go ahead, sir.

Unidentified Analyst

[Foreign Language]

Yes, I have a question regarding the actual commissioning for Shin-Kori number 5 and number 6. When do you expect that to take place? Will it be within the year 2013? And secondly, will there be any plan for selling off of assets? So what kind of plans do you have in place for selling off the assets that you are holding in the subsidiary?

Chang-Keun Shin

[Foreign Language]

I would like to answer your first question. This is according to the information we received from the KHNP quite recently. They expect the orders to go out regarding Shin-Kori number 5 and number 6 in November, which is this month.

[Foreign Language]

As for your second question regarding sales of shares, well we are considering this option in various perspectives. We have no concrete plans to announce as of yet nor any figures to share with you as of yet.

Unidentified Analyst

[Foreign Language]

Chang-Keun Shin

[Foreign Language]

Operator

[Foreign Language]

Currently there are no participants with the questions (Operator Instructions).

Chang-Keun Shin

[Foreign Language]

We will take one final question.

Operator

[Foreign Language]

(Operator Instructions)

The last question is by Mr. Yoo Deok-sang from Dongbu Securities. Please go ahead, sir.

Yoo Deok-sang – Dongbu Securities Co. Ltd.

[Foreign Language]

Yes, I would like to ask a question that it’s not directly related to the earnings result that you are announcing today, but currently when you see what is going on regarding the movements of the IPP and other investors and other operators as well, it seems that KEPCO is going towards the trend of reducing the proportion that is focused on LNG fueled power plants, but it seems that for the IPPs, the situation is a little bit different. So could you elaborate on what this trend is meaning?

Chang-Keun Shin

[Foreign Language]

First of all, thank you for your question.

[Foreign Language]

But I am afraid that I would like to get back to you and follow-up with you regarding this question, because I believe that we would also need to look into the various elements that you are referring too. So if you would excuse us, we would like to get back to you.

Yoo Deok-sang – Dongbu Securities Co. Ltd.

[Foreign Language]

Chang-Keun Shin

[Foreign Language]

Changyoung Ji

[Foreign Language]

All right then, now we will conclude this conference call. Once again thank you for joining us today. Thank you. Bye-bye.

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