Home Page ContentPress Releases SK Telecom Announces 2011 1Q Earnings Results

SK Telecom Announces 2011 1Q Earnings Results

by david.nunes

SK Telecom Announces 2011 1Q Earnings Results

§ Revenue of KRW 3.132 trillion, operating income of KRW 598 billion and net income of KRW 560.7 billion

§ On a year-on-year basis, revenue, operating income and net income increased by 2.7%, 16.0% and 35.7%, respectively

§ Net income increased sharply due to a one-time profit from sales of its SK C&C shares

§ Raised CAPEX guidance for 2011 by KRW 300 billion to KRW 2.3 trillion to strengthen competitive edge in network infrastructure

※ All business performance figures are based on international Financial Reporting Standard (IFRS), which was also applied to the figures for the previous year, for comparison of period-specific performance

Hong Kong, 4 May 2011 – SK Telecom (NYSE:SKM) announced its earnings for the first quarter of 2011: revenue of KRW 3.132 trillion, operating income of KRW 598 billion and net income of KRW 560.7 billion.

The revenue grew 2.7% year-on-year (YoY) backed by growth in smartphone subscribers but dropped 2.5% quarter-on-quarter (QoQ) due to fewer business days in the current quarter.

Operating income climbed 16.0% YoY and 8.6% QoQ helped by increased revenues and decreased marketing expenses as the company made aggressive efforts to stabilize the market. Net income jumped 35.7% YoY and 0.5% QoQ due to a one-time profit of KRW 152.5 billion on sale of its stake in SK C&C.

Marketing expenses went down 7.0% YoY, but up 5.7% QoQ to stand at KRW 785.4 billion, accounting for 25.1% of Q1 revenues. However, based on the government’s marketing cost calculation method, marketing expenses took up 23.8% of Q1 revenue.

SK Telecom secured 6 million smartphone subscribers as of 4 May and expects to exceed its 10 million smartphone subscriber target by year-end by releasing both high-end and affordable smartphones.

The company raised 2011 CAPEX guidance from KRW 2 trillion to KRW 2.3 trillion to invest in 3G network and LTE so as to further strengthen its network competitiveness and expand network capacity.

According to the consolidated financial statement that factor the company’s subsidiaries into its aggregated accounting figure, SK Telecom recorded KRW 3.909 trillion in revenue, KRW 614.3 billion of operating profit and KRW 537.3 billion of net income.

SK Telecom’s CFO Ahn Seung-Yun said, “SK Telecom continues to maintain its leadership position in the mobile Internet market by launching Korea’s first LTE network trial in April and further strengthens its competitive edge in quality and service. SK Telecom will constantly identify and promote high-potential business opportunities while focusing on its existing growth engines like commerce and T Store.”

About SK Telecom

SK Telecom (NYSE: SKM, KSE: 017670) is Korea’s leading telecommunications provider with more than 25 million subscribers, which accounts for more than 50% of the total market. The company established in 1984, reached KRW 12.1 trillion in revenue in 2009. SK Telecom was the first to launch and commercialize CDMA, CDMA 2001x, CDMA EV-DO and HSDPA networks, and it currently provides cellular, wireless internet, mobile media, global roaming service and more. For more information, please visit www.sktelecom.com or email to press@sktelecom.com.

Media Contact:

Lauren H. Kim

SK Telecom Co. Ltd.

(822) 6100-3830

hyunkim@sktelecom.com

Irene Kim

SK Telecom Co. Ltd.

(822) 6100-3834

gahaekim@sktelecom.com

Winnie Pang

Hill & Knowlton Asia Ltd.

(852) 2894 6233

Winnie.Pang@hillandknowlton.com.hk

####

<Attachment 1> Summary and Comparison of Separate Income Statement

<Attachment 2> Summary and Comparison of Separate EBITDA

<Attachment 3> Summary and Comparison of Consolidated Income Statement

<Attachment 4> Summary and Comparison of Consolidated EBITDA

※ The conference call in regard to SK Telecom’s 2011 1Q earnings results can be heard via SK Telecom’s webpage on Wednesday 4 May, from 4:00 PM Seoul Time.

Link: http://aod.teletogether.com/sktelecom/20110504/eng.html

<Attachment 1> Summary and Comparison of Separate Income Statement

(IFRS Separate Financial Statement, Unit: KRW 1 Billion)

Type
YoY
QoQ

’11. 1Q
’10. 1Q
Change
’11.1Q
’10. 4Q
Change

Revenue
3,132
3,050
2.7%
3,132
3,211
-2.5%

Operating

Expenses
2,534
2,535
0.0%
2,534
2,660
-4.7%

Operating

Income
598
515
16.0%
598
551
8.6%

Net Profit or Loss in Non-Operating Items
191
12
1,633.3%
191
135
41.9%

(Separate)

Net Income
561
413
35.7%
561
558
0.5%

<Attachment 2> Summary and Comparison of Separate EBITDA

(IFRS Separate Financial Statement, Unit: KRW 1 Billion)

Type
YoY
QoQ

’11. 1Q
’10. 1Q
Change
’11.1Q
’10. 4Q
Change

EBITDA
1,046
954
9.6%
1,046
982
6.6%

EBITDA Margin
33.4%
31.3%
2.1%p
33.4%
30.6%
2.8%p

<Attachment 3> Summary and Comparison of Consolidated Income Statement

(IFRS Consolidated Financial Statement, Unit: KRW 1 Billion)

Type
YoY
QoQ

’11. 1Q
’10. 1Q
Change
’11.1Q
’10. 4Q
Change

Revenue
3,909
3,764
3.8%
3,909
4,023
-2.8%

Operating

Expenses
3,295
3,288
0.2%
3,295
3,511
-6.2%

Operating

Income
614
476
29.0%
614
512
19.9%

Net Profit or Loss in Non-Operating Items
155
-25
n/a
155
109
41.4%

(Consolidated)

Net Income
537
343
56.5%
537
504
6.6%

<Attachment 4> Summary and Comparison of Consolidated EBITDA

(IFRS Consolidated Financial Statement, Unit: KRW 1 Billion)

Type
YoY
QoQ

’11. 1Q
’10. 1Q
Change
’11.1Q
’10. 4Q
Change

EBITDA
1,200
1,058
13.4%
1,200
1,047
14.7%

EBITDA Margin
30.7%
28.1%
2.6%p
30.7%
26.0%
4.7%p

 

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