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SK Telecom's Q2 2023 Financial Results and Business Analysis

Source: SK Telecom

Seoul, South Korea - SK Telecom (NYSE: SKM) has announced its earnings results for the second quarter of 2023.

Why it matters:

The company continues to drive remarkable growth across multiple areas, highlighting a transformative approach to becoming a global AI leader.

These results shed light on SK Telecom's positioning within the tech industry and its further goals to solidify its market position.

The Key Points

Financial Performance

  • Consolidated basis: SK Telecom's consolidated revenues reached KRW 4,306 trillion (US$3.26 billion), operating income KRW 463.4 billion (US$351.5 million), and net income KRW 347.8 billion (US$263.6 million).
  • Year-on-year (YoY) growth: Consolidated sales and operating income grew by 0.4% and 0.8%, respectively, compared to the second quarter of 2022.
  • Non-consolidated basis: The company posted sales of KRW 3,119 trillion (US$2.36 billion), operating income of KRW 379.1 billion (US$287.4 million), and net income of KRW 272.8 billion (US$206.8 million).
  • Dividend Policy: SK Telecom declared a dividend of KRW 830 (US$0.63) per share for the second quarter of 2023, further demonstrating its commitment to increasing shareholder value.

Key Business Developments

  • Data Center and Cloud Growth: Data center revenue increased more than 30% year-on-year, while cloud business grew more than 60% year-on-year, driven by firm orders from the gaming and financial sectors.
  • Enterprise business: A remarkable growth of over 9.2% y-o-y to KRW 407.1 billion, supported by establishing new data centers and a high utilization rate.
  • Media business revenue: Increased by 1.2% y-o-y to KRW 386.5 billion, mainly due to high-quality assets such as TEAM studio and Btv.
  • Strategic partnerships and alliances
  • Global Telco AI Alliance: SK Telecom allied with Deutsche Telekom, e& and Singtel to develop the Telco AI Platform jointly.
  • Collaboration with Microsoft: Leveraging Microsoft's Azure OpenAI service, SK Telecom added "Chat T" to its AI service "A.", enabling enriched user interactions.
  • Investing in urban air mobility: SK Telecom invested $100 million in Joby Aviation and acquired a 2% stake, leading innovation in UAM in Korea.

Metaverse and Subscription Services

  • “ifland" growth: SK Telecom's Metaverse platform saw 30% of its MAUs come from overseas in the second quarter, with 400,000 "ifland" created since May 2023.
  • T Universe" surpassed milestones: The subscription service reached 2 million MAUs in the second quarter thanks to strong partnerships.

Telecommunications leadership

  • 5G and broadband subscribers: At the end of Q2, SK Telecom had 14.67 million 5G subscribers, while SK Broadband had 9.46 million pay-TV subscribers and 6.81 million broadband subscribers.
  • New price plans: Launched 25 new plans, including the famous "0 Youth Plan" for younger customers.

The Big Picture:

SK Telecom's Q2 results reveal a multi-pronged approach to achieving growth in core businesses while expanding into innovative technology areas such as AI and the metaverse.

These financial and strategic announcements reflect broader trends in the tech and telecom sectors and provide insight into SK Telecom's willingness to engage in emerging markets.

The company's commitments, such as dividends and share repurchases, reflect a balanced approach to enhancing shareholder value while investing in growth opportunities.