SEOUL, KOREA — SK Telecom (NYSE:SKM) announced its earnings on a K-IFRS consolidated basis for the first quarter of 2012: revenue of KRW 3.986 trillion, operating income of KRW 452.3 billion and net income of KRW 323.3 billion.
The revenue grew 2.0% year-on-year (YoY) after strong wireless internet revenue growth - backed by the continuously increasing number of smartphone subscribers - and robust sales recorded by its subsidiaries including SK Planet have been somewhat offset by the impact of diverse mobile tariff cut measures that took effect since October 2011.
The operating income, affected most directly by the tariff cuts, decreased by 26.4% YoY due to factors including expanded network investment carried out in response to explosive growth of data traffic. The consolidated net income for the first quarter dropped 39.8% compared to the same period last year.
EBITDA fell by 12% YoY to KRW 1.078 trillion, which translates into an EBITDA margin of 27%, 4.3%P lower than the same period last year.
After launching LTE smartphones in September 2011, SK Telecom surpassed one million LTE subscriber mark in the end of January 2012, taking the shortest period of time among all carriers that introduced LTE service. Moreover, the company is witnessing an accelerated speed of LTE subscriber growth, further widening the gap with its competitors by securing 2.4 million LTE subscribers as of the end of April 2012. The company also projects to exceed its initial target of 6 million LTE subscribers by the end of this year.
SK Telecom expects its LTE market leadership and robust subscriber growth to result in improving its earnings in the mid-to long-term. The company is also working to enter global markets by accelerating the growth of its B2B and healthcare business, and strengthening SK Planet’s core platform business including 11th Street, T Store and T Map.
SK Telecom’s Chief Financial Officer Ahn Seung-Yun said, “SK Telecom will maintain its solid leadership in the era of 4G LTE through differentiated network quality, as well as a wide variety of attractive services and contents. With the aim to achieve its newly set vision announced in March 2012, SK Telecom, SK Planet and SK Hynix will secure unrivalled capability in their respective fields, while working together to generate synergies to lead the future ICT industry.”