SK Telecom Co Ltd (SKM) Q3 2024 Earnings Call Highlights: Strong Revenue Growth Amid AI and 5G ...

In This Article:

  • Consolidated Revenue: KRW4,532.1 billion, up 2.9% year over year.

  • Operating Income: KRW533.3 billion, up 7.1% year over year.

  • Net Income: KRW280.2 billion.

  • Non-Consolidated Revenue: KRW3,203.2 billion, up 1.7% year over year.

  • Non-Consolidated Operating Income: KRW457 billion.

  • Non-Consolidated Net Income: KRW222.4 billion.

  • Data Center Revenue Growth: 14% year over year.

  • 5G Subscribers: 16.58 million, accounting for 73% of the total subscriber base.

  • Pay TV Subscribers: 9.62 million.

  • Broadband Subscribers: 7.11 million.

  • Enterprise Business Growth: 8% year over year.

  • Cloud Business Revenue Growth: 30% year over year.

  • Dividend Per Share (DPS) for Q3: KRW830.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • SK Telecom Co Ltd (NYSE:SKM) reported a 2.9% year-over-year increase in consolidated revenue for Q3 2024, driven by stable growth in roaming and B2B solution businesses.

  • Operating income increased by 7.1% year over year, attributed to cost stabilization in marketing and depreciation.

  • The company has established a strong AI Pyramid Strategy, focusing on AI data centers, AI B2B, and AI B2C to generate profit.

  • Data center revenue grew by 14% year over year, indicating higher utilization and potential for short-term results in AI monetization.

  • SK Telecom Co Ltd (NYSE:SKM) has a robust 5G subscriber base, with 16.58 million subscribers, accounting for 73% of the total subscriber base.

Negative Points

  • Consolidated net income fell by about 9% year over year due to recognition of valuation losses from investment assets as non-operating expenses.

  • Despite the positive market response to AI initiatives, the company faces challenges in monetizing AI services effectively.

  • SK Telecom Co Ltd (NYSE:SKM) was not included in the core value index announced by the Korean Exchange, indicating potential concerns about market perception.

  • The company faces competition in the AI B2C market, traditionally led by platform companies, which may impact its market share and profitability.

  • There is uncertainty regarding the year-end dividend, as it depends on the closing of the fourth quarter earnings and board deliberation.

Q & A Highlights

Q: With the larger recognition of non-operating losses leading to a smaller net income, will this impact your year-end dividend? Also, can you explain the background of your Corporate Value-Up Plan disclosure? A: Yang Seop Kim, CFO, explained that the valuation losses are one-off non-recurring items and will not affect the dividend payout. The company remains committed to maintaining a stable dividend trend. Regarding the Corporate Value-Up Plan, it was disclosed to enhance corporate value and includes key indicators like ROE and AI Vision 2030. SK Telecom aims to improve ROE and maintain a high shareholder return ratio.

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