SK Telecom Q1 net income down 61.5 pct following chip biz spinoff

SEOUL-- SK Telecom Co., South Korea's largest mobile carrier, said Tuesday its first quarter net profit dropped 61.5 percent from a year earlier due mainly to the spinoff of its semiconductor businesses last year.

The company said in a regulatory filing that its net profit for the January-March period stood at 220.3 billion won (US$172.5 million), compared with 572 billion won from a year ago. Operating profit rose 15.5 percent to 432.4 billion won, and sales increased 3.9 percent to 4.27 trillion won.

The earnings failed to meet market expectations. The average estimate of net profit by analysts stood at 292.7 billion won, according to the survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The company said its on-year decrease in net profit is mainly blamed on the exclusion of equity gains from SK hynix Inc. following the spinoff of the chip manufacturing business in November of last year.

In November, SK Telecom split into two companies, spinning off the new investment company SK Square in a move to make aggressive investments in new tech and semiconductor businesses.

SK Square oversees 16 of SK Telecom's existing non-telecom and tech units, including chipmaking affiliate SK hynix, app market operator ONE Store, e-commerce platform 11Street and T Map Mobility.

The surviving SK Telecom focuses on its traditional telecom business while advancing new businesses, including metaverse platforms.

SK Telecom said its mobile network operation and IPTV businesses led the growth of its sales and operating profit. The company saw its 5G service subscribers grow by more than 1 million in the first quarter, and monthly active users of its metaverse platform ifland reached 1.35 million as of the end of March.

Sales from media-related business grew 10.3 percent and its enterprise businesses using its data center and cloud products also climbed by 17.4 percent, the company said.

Source: Yonhap News Agency