SK Telecom’s Q4 net down 14 pct on non-telecom spinoff

February 9, 2022

 SK Telecom Co., South Korea’s largest mobile carrier, said Wednesday its fourth-quarter net profit fell 14 percent from a year earlier due mainly to one-time costs from its non-telecom spinoff.

Net profit fell to 314.8 billion won (US$263.4 million) in the October-December period from a profit of 365.9 billion won the previous year, the company said in a regulatory filing.

Operating income reached 226.7 billion won, down 22.6 percent from 292.7 billion won the previous year, while sales rose 3.9 percent to 4.29 trillion won over the same period.

For the whole of 2021, the company enjoyed a strong performance, with net profit jumping 61.2 percent to 2.42 trillion won and operating income increasing 11.1 percent to 1.39 trillion won last year. Annual sales rose 4.1 percent to 16.75 trillion won.

SK Telecom Co.'s headquarters in central Seoul is seen in this undated file photo provided by the company. (PHOTO NOT FOR SALE) (Yonhap)
SK Telecom Co.’s headquarters in central Seoul is seen in this undated file photo provided by the company. (PHOTO NOT FOR SALE) (Yonhap)

Sales from its mobile service grew to 2.59 trillion won in the fourth quarter thanks to continued subscriber growth.

The mobile carrier’s 5G users stood at 9.87 million as of the end of last year, accounting for nearly half of total mobile subscriptions to 5G networks, according to government data.

The company said its on-year decrease in net profit for the fourth quarter is mainly blamed on one-off costs from employee bonuses related to the non-telecom spinoff last year.

On Nov. 1, SK Telecom split into two companies, spinning off the new investment company SK Square in the latest move to make aggressive investments in new tech and semiconductor businesses.

SK Square oversees 16 of SK Telecom’s existing non-telecom and tech units, including chipmaking affiliate SK hynix Inc., app market operator ONE Store, e-commerce platform 11Street and T Map Mobility.

The surviving SK Telecom largely focuses on its traditional telecom business while advancing new businesses, including metaverse-based services and artificial intelligence.

SK telecom said it will further accelerate the transformation into an AI and digital service company by exploring new businesses in metaverse, robotics and urban air mobility.

“Our company aims to reach 30 million monthly active users on our metaverse platforms by 2025… and to accelerate growth in innovative businesses to reach an annual revenue of 23 trillion won by 2025,” CEO Ryu Young-sang said during a conference call.

Ryu added the company will seek to pursue a strategic merger and acquisition (M&A) with metaverse and tech-related companies to secure a sufficient number of competent developers, as well as opportunities for global M&As to expand into the international market.

Shares in SK Telecom rose 0.54 percent to 56,200 won on the main KOSPI market. The company reported its fourth-quarter earnings before the market closed.