SK Telecom Announces 2011 3Q Earnings Results § Revenue of KRW 4.065 trillion, operating income of KRW 531.4 billion and consolidated net income of KRW 383.9 billion (K-IFRS consolidated) § On a year-on-year basis, revenue increased by 1.9%, while operating income and consolidated net income decreased by 17.2% and 18.4%, respectively § Revenue grew thanks to increased wireless internet usage and new business models, while operating income and net income contracted due to factors including expanded R&D investment and spin-off of SK Planet |
※ All business performance figures are based on Korean International Financial Reporting Standards (K-IFRS), which was also applied to the figures for the previous year, for comparison of period-specific performance. Summary chart of non-consolidated figures is also provided.
Hong Kong, 27 October 2011 – SK Telecom (NYSE:SKM) announced its earnings on a K-IFRS consolidated basis for the third quarter of 2011: revenue of KRW 4.065 trillion, operating income of KRW 531.4 billion and net income of KRW 383.9 billion.
The revenue grew 1.9% year-on-year (YoY) and 0.6% quarter-on-quarter (QoQ) as wireless internet usage grew with the increased number of smartphone subscribers and new business models including enterprise solutions, although the mobile service revenue dropped by 1.1% YoY caused by the implementation of discount policies and tariff cuts including a KRW 1,000-cut in its monthly mobile service rates.
Although the company cut marketing expenses through its market stabilization efforts, the operating income decreased 17.2% YoY and 19.4% QoQ as operating expenses increased due to one-off cost incurred by the spin-off of SK Planet, spectrum reallocation and expanded R&D investment. In the third quarter of 2011, SK Telecom invested KRW 552.3 billion, which is 14.6% more than that of the same period last year.
EBITDA marked KRW 1.166 trillion, contracting by 1.2% YoY and 7.8% QoQ. EBITDA margin stood at 28.7%, decreasing 0.9%P YoY and 2.6%P QoQ.
On a non-consolidated basis, SK Telecom recorded KRW 3.212 trillion in revenue, KRW 508.8 billion of operating profit and KRW 388.7 billion of net income. Compared to the same period last year, the revenue remained at the similar level, while operating income and net income went down 21.0% and 24.4%, respectively. The decrease in the operating income was caused by the rise in the 3Q depreciation cost as straight line method was applied under the IFRS.
SK Telecom’s Chief Financial Officer Ahn Seung-Yun said, “With differentiated network quality and services, SK Telecom will further solidify its leadership as the top mobile network operator in Korea, fully leveraging its 4G LTE commercial service and the popularization of smartphones. At the same time, SK Telecom will build a strong growth momentum by developing new business models in the fixed/wireless internet area, and creating solutions and platforms in the fields of education, health care and distribution.”
About SK Telecom
SK Telecom (NYSE: SKM, KSE: 017670) is Korea’s leading telecommunications provider with more than 26 million subscribers, which accounts for more than 50% of the total market. The company established in 1984, reached KRW 12.46 trillion in revenue in 2010. SK Telecom was the first to launch and commercialize CDMA, CDMA 2000 1x, 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:
D.W. Kim
SK Telecom Co. Ltd.
(822) 6100-3862
Irene Kim
SK Telecom Co. Ltd.
(822) 6100-3834
Winnie Pang
Hill & Knowlton Asia Ltd.
(852) 2894 6233
Winnie.Pang@hillandknowlton.com.hk
<Attachment 1> Summary and Comparison of Consolidated Income Statement
<Attachment 2> Summary and Comparison of Non-Consolidated Income Statement
<Attachment 3> Summary and Comparison of Consolidated EBITDA
※ The conference call in regard to SK Telecom’s 2011 3Q earnings results can be heard via SK Telecom’s webpage on Thursday 27 October, from 4:00 P.M. Seoul Time.
Link: http://aod.teletogether.com/sktelecom/20111027/eng.html
<Attachment 1> Summary and Comparison of Consolidated Income Statement (K-IFRS Consolidated Financial Statement, Unit: KRW 1 Billion)
Type | YoY | QoQ | ||||
’11. 3Q | ’10. 3Q | Change | ’11.3Q | ’11. 2Q | Change | |
Revenue | 4,065 | 3,988 | 1.9% | 4,065 | 4.041 | 0.6% |
Operating Expenses | 3,533 | 3,346 | 5.6% | 3,533 | 3,381 | 4.5% |
Operating Income | 531 | 642 | -17.2% | 531 | 660 | -19.4% |
Net Profit or Loss in Non-Operating Items | -28 | -13 | -109.3% | -28 | -12 | 139.2% |
Net Income | 384 | 471 | -18.4% | 384 | 465 | -17.5% |
<Attachment 2> Summary and Comparison of Non-Consolidated Income Statement
(K-IFRS Non-Consolidated Financial Statement, Unit: KRW 1 Billion)
Type | YoY | QoQ | ||||
’11. 3Q | ’10. 3Q | Change | ’11.3Q | ’11. 2Q | Change | |
Revenue | 3,212 | 3,211 | – | 3,212 | 3,194 | 0.6% |
Operating Expenses | 2,703 | 2,567 | 5.3% | 2,703 | 2,563 | 5.5% |
Operating Income | 509 | 644 | -21.0% | 509 | 631 | -19.4% |
Net Profit or Loss in Non-Operating Items | -10 | 28 | -136.6% | -10 | 18 | -156.8% |
Net Income | 389 | 514 | -24.4% | 389 | 474 | -18.1% |
<Attachment 3> Summary and Comparison of Consolidated EBITDA
(K-IFRS Consolidated Financial Statement, Unit: KRW 1 Billion)
Type | YoY | QoQ | ||||
’11. 3Q | ’10. 3Q | Change | ’11.3Q | ’11. 2Q | Change | |
EBITDA | 1,166 | 1,181 | -1.2% | 1,166 | 1,266 | -7.8% |
EBITDA Margin | 28.7% | 29.6% | -0.9%p | 28.7% | 31.3% | -2.6%p |
