SK Telecom Q3 OP up 12% on year and net +88% thanks to strong 5G, new biz

South Korea’s leading wireless carrier SK Telecom Co. closed the third quarter with better-than-expected earnings results on revenue growth in both new and existing businesses.

SK Telecom in its regulatory filing on Wednesday reported an operating profit of 400 billion won ($338.3 million) in the July-September period on a consolidated basis, up 0.85 percent from three months ago and 11.7 percent from a year earlier.

Net profit fell 7.44 percent on quarter but jumped 88 percent on year to 736.5 billion won, while sales added 3.1 percent from a year ago and 4.99 percent against the previous year to total 4.97 trillion won.

The rapid on-year growth in net profit was owed to strong performance of SK hynix, its chip making affiliate in which SK Telecom owns a 20 percent.

The figures were slightly above the market consensus of 395.7 billion won in operating profit and 4.91 trillion won in revenue.

The wireless business delivered an operating profit of 319.6 billion won, gaining 21.9 percent on year, with sales up 2.9 percent to 3.03 trillion won. It now is exploring new business opportunities with its newly launched subscription-based platform “T Universe” and metaverse service platform “Ifland” and expanding existing datacenter and cloud businesses.

In an aim to take the lead in metaverse at home, SK Telecom plans to transform the Ifland into an open platform in which users create own new world and further seek for more partnership with various other companies in the gaming and entertainment segments.

The number of 5G subscribers surged 102.9 percent on year to 8.65 million as of the end of September, taking up 27.4 percent of all mobile subscribers. Cumulative capital spending in the wireless business however contracted 21.5 percent to 1.15 trillion won.

The media business posted an operating profit of 78.6 billion won after adding 21.3 percent on year. Its revenue rose 6.1 percent to record 1.02 trillion won thanks to increased IPTV service subscribers.

SK Broadband ranked top in the number of IPTV and cable TV subscribers in the first nine months reaching 8.91 million in total.

The commerce business including its online shopping platform 11st Street and SK Stoa earned 209.5 billion won in revenue, up 1.4 percent from the previous year.

SK Telecom completed its first reorganization in its 37-year history on Nov. 1. It now focuses only on the telecommunications business, and independent entity SK Square is responsible for non-telecom business such as new investments in semiconductors and information and communications technologies.

“Ifland” [Source: SK Telecom]

The company last year set up a target to expand its annual revenue to 22 trillion won by 2025 from 15 trillion won in 2020. It plans to groom wired/wireless communications, AI service and digital infrastructure service as its three key businesses.

SK Square is preparing bold and preemptive investments based on its major portfolio assets in chips, media, security and commerce. It aims to improve its net asset value to 75 trillion won by 2025, almost tripled from current 26 trillion won.

“SK Telecom and SK Square have successfully paved the way for another leap forward through the latest reorganization. We’ll raise the corporate value based on cement market leadership and innovation to become a more trusted company,” said Kim Jin-won, chief financial officer at SK Telecom.

SK Telecom shares will be relisted on the Kospi on Nov. 29 after a month-long trade suspension. SK Square shares will be listed on the same day as well.

[ㄏ Maeil Business Newspaper & mk.co.kr, All rights reserved]