SEOUL, KOREA – SK Telecom (NYSE:SKM) announced its earnings on a IFRS consolidated basis for the year 2011: revenue of KRW 15.945 trillion, operating income of KRW 2.135 trillion and net income of KRW 1.583 trillion.
Despite the growing impact of mobile tariff cuts on the company’s profit, revenues increased by 2.2% compared to the year 2010, backed by expanded wireless internet revenue and strong growth of its new businesses like 11st, an online shopping site.
Operating income and net income contracted by 6.3% and 10.4%, respectively, due to expanded investment made to strengthen mobile network competitiveness and handle growing data traffic; increased cost for the acquisition of additional spectrum; and initial investments in new businesses.
EBITDA for 2011 grew by 1.4% compared to the previous year to stand at KRW 4.521 trillion and EBITDA margin recorded 28.4%, remaining similar to that of 2010 (28.6%).
On a non-consolidated basis, SK Telecom recorded KRW 12.705 trillion in revenue, KRW 2.095 trillion of operating profit and KRW 1.705 trillion of net income for the year 2011. Compared to the previous year, the revenue went up 1.2%, while operating income and net income went down 11.1% and 12.4%, respectively.
2011 marketing expenses dropped by 2.1% compared to that of 2010 to record KRW 3.255 trillion thanks to constant market stabilization efforts. However, operating income and net income decreased due to 23.4% greater investment cost (KRW 2.277 trillion) than that of the previous year as well as expanded frequency cost and depreciation cost.
Ha Sung-min, President and CEO of SK Telecom said, “Although faced with challenges such as slow down of revenue growth caused by mobile tariff cuts and the rise of new types of business models, SK Telecom successfully commercialized LTE service and secured 1.8GHz spectrum in 2011, thus laying a solid foundation to become a leader in the data service competition.
Moreover, through the spin-off of SK Planet and acquisition of Hynix Semiconductor Inc., SK Telecom is now set to develop greater opportunities and achieve new growth. SK Telecom will enhance its corporate value by increasing competitiveness and profitability in the mobile telecommunications business through continuous investments in 2012 that are expected to be similar to that of last year, and by establishing a new growth structure - aligning mobile telecommunication, platform and semiconductor businesses – through synergies and cooperation with its non-telecom subsidiaries.
All business performance figures are based on Korean International Financial Reporting Standards (K-IFRS), which has been applied the second quarter of 2011. Summary chart of non-consolidated figures is also provided.
