SK Telecom's net drops 67.6 percent, misses expectations

SK Telecom on Tuesday reported a net profit of 258.1 billion won ($197.7 million) for the April-June period, a 67.6 percent drop on year.

SK Telecom on Tuesday reported a net profit of 258.1 billion won ($197.7 million) for the April-June period, a 67.6 percent drop on year.

The figure fell short of the market forecast of 310.8 billion won compiled by FnGuide.

The steep decline in the net was due to the SK Square spin-off last year, as equity contributions from SK hynix have been excluded in the second-quarter earnings. Spun off from SK Telecom last November, SK Square took stakes in non-telecom companies related to SK Telecom. SK hynix was one of the assets transferred.

SK Telecom's sales rose 4.0 percent year on year to 4.29 trillion won, and operating profit was 459.6 billion won, up 16.1 percent. Both figures fell slightly short of market expectations.

SK Telecom gained 800,000 5G subscribers in the April-June period. The number of 5G subscribers reached 11.68 million in total as of June, according to the Ministry of Science and ICT, half of its total handset subscribers.

SK Telecom recently rolled out five mid-range 5G subscription plans to enhance customer options. The science ministry has been urging mobile carriers to come up with more options for 5G subscriptions, following public criticism about limited plans.

"As more customers will be able to enjoy 5G services with the new plans, we believe that we can reach our target of 13 million 5G subscribers by the end of this year," said SK Telecom Chief Financial Officer Kim Jin-won during an online conference on quarterly earnings Tuesday.

Other mobile carriers ― KT and LG U+ — are also planning to offer more affordable 5G subscription options. KT aims to introduce new mid-range 5G subscription plans as early as this month.

Sales from media-related businesses rose 22.3 percent to 382.1 billion won. Enterprise data center and cloud product sales increased 13.8 percent to 374.3 billion won, with the cloud business, up 133 percent on year in sales, driving the figure.

Monthly active users of its ifland metaverse service reached 1.63 million as of June, up from 1.35 million in March. SK Telecom said that it hopes to expand the service into the global market in the second half through overseas companies in Europe, North America, Middle East and Asia.

On July 24, the company swapped 400 billion won of shares with Hana Financial Group to co-develop online financial services and the cloud business.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]