• Posts revenue of KRW 4.450 trillion, operating income of KRW 302.0 billion and net income of KRW 306.8 billion
• Compared to last year, revenue increased by 2.7% backed by growth of 5G subscribers and new businesses
• Plans to secure new growth drivers for media business through the merged entity between SK Broadband and T-broad
Aims to overcome the current coronavirus crisis through balanced growth of four main business areas
SK Telecom (NYSE:SKM) today announced its earnings for the first quarter of 2020 on a K-IFRS consolidated basis: revenue of KRW 4.450 trillion, operating income of KRW 302.0 billion, and net income of KRW 306.8 billion.
Compared to the same period last year, SK Telecom’s revenue increased by 2.7% backed by the growth of its 5G subscribers and new businesses, while the operating income decreased by 6.4% due to expanded 5G network investment costs including 5G spectrum licensing fees. Net income fell by 17.9% affected by factors including decreased equity method gains from SK Hynix.
On a non-consolidated basis, SK Telecom’s 1Q revenue stood at KRW 2.923 trillion, representing a 3.9% growth compared to last year. Despite a decline in the international roaming revenue and a slower rate of mobile market growth caused by the coronavirus (COVID-19) pandemic, the company’s mobile communication business continued its growth that began in the second quarter of 2019 with the increase of 5G subscribers.
SK Telecom continues to strengthen its position as the No. 1 mobile carrier in the 5G era by securing a total of 2.65 million 5G subscribers (as of the end of 1Q 2020) and becoming the first company in Korea to be listed No.1 in the National Customer Satisfaction Index for 23 consecutive years.
The company plans to introduce differentiated 5G specialized services including cloud games and AR/VR services, and strengthen its marketing activities centered on ‘5G Clusters,’ where customers can experience 5G services and enjoy diverse benefits. It will also focus on providing its customers with a new communication experiences by promoting hyper-collaboration with diverse companies throughout the globe.
SK Telecom’s new business areas including media, security and commerce sustained their solid growth in the first quarter of 2020.
SK Broadband’s revenue for the first quarter increased by 8.2% year-on-year (YoY) to KRW 823.5 billion backed by the growth of its IPTV business.
By completing its merger with T-broad on April 30, 2020, SK Broadband turned itself into a media platform company with 8.21 million pay TV subscribers and 6.48 million broadband subscribers. The merged entity will advance its media platform and increase business models to strengthen its competitiveness in both IPTV and cable TV services so as to reach an annual revenue of over KRW 4 trillion this year.
SK Telecom’s security business – ADT Caps and SK Infosec – posted a quarterly revenue of KRW 291.4 billion, representing a 5.4% YoY increase.
ADT Caps and SK Infosec plan to achieve an annual revenue of KRW 1.3 trillion this year through aggressive investment in new business areas including unmanned parking, home security and personal care, while further solidifying dispatch security market leadership based on technology innovations and synergies with other ICT affiliates of SK.
The company’s revenue for commerce business – 11st and SK Stoa – decreased by 4.5% YoY due to changes in the accounting standards that went in effect since the fourth quarter of 2019. The revenue increased by approximately 3% when excluding the effects of the new accounting standards. Compared to the previous year, the total transaction volume of 11st increased by around 9%, while SK Stoa’s revenue jumped 44% by expanding its sales channels to online and mobile.
11st plans to accelerate its growth by increasing partnerships and delivery capacity to secure sales competitiveness fit for the current consumption trend where customers prefer non-face-to-face contact. SK Stoa will also strengthen its private label products and leverage its newly added sales channels and strong planning/sourcing capabilities to lead the market.
SK Telecom is making constant efforts to introduce useful services amid the coronavirus pandemic. It is providing ‘T Group Call,’ a group calling service that supports group calls between up to 100 persons. The company has established a game platform joint venture with Singtel and AIS in March 2020 and is currently working with One Store to develop a gaming community and game media content platform. In addition, T1, a global esports joint venture established between SK Telecom and Comcast Spectacor, is making noticeable achievements, which include its sponsorship agreements with the BMW Group.
“Over the past three years, we have diversified our business portfolio centered on mobile communication, media, security and commerce to attain sustainable long-term growth,” said Yoon Poong-young, Chief Financial Officer of SK Telecom. “We will successfully navigate through the current crisis by achieving balanced growth of our four main business areas.”
< Attachment 1 > Summary of Consolidated Income Statement
< Attachment 2 > Summary of Non-Consolidated Income Statement
※ The conference call in regard to SK Telecom’s 2020 1Q earnings results can be heard via SK Telecom’s webpage on Thursday, May 7, from 3:00 PM Seoul Time.
Link: http://cc.onoffjoin.com/webcast/skt/skt2020Q1_en.php
