SKT Operating Profit 537.5 Billion KRW... "Data Center and Cloud Achievements" (Comprehensive)

SK Telecom Q2 Earnings Announcement on the 6th
2.7% Increase in Revenue and 16.0% Rise in Operating Profit YoY
"We Will Showcase AI Business Results in the Second Half"

SK Telecom announced on the 6th that its operating profit for the second quarter of this year reached 537.5 billion KRW on a consolidated basis, marking a 16.0% increase compared to the same period last year. Revenue rose by 2.7% to 4.4224 trillion KRW during the same period. Net profit recorded 350.2 billion KRW.

On a separate basis, revenue was 3.1915 trillion KRW, with operating profit and net profit at 450.4 billion KRW and 280.3 billion KRW, respectively.

The increase in revenue and operating profit appears to have been influenced by the improved performance of both wired and wireless businesses as well as key affiliates. In particular, enterprise business revenue grew by 11% year-on-year to 434.2 billion KRW, driven by higher data center utilization rates and increased cloud orders.

In the second quarter, SKT also achieved its first AI cloud business contract targeting domestic internet service companies. SKT plans to actively expand the scale of its AI cloud business going forward.

The data center business achieved a 20.5% revenue growth compared to the same period last year due to continuous increases in utilization rates. SKT has a strategy to evolve and develop its existing data center business into an AI data center business. Recently, SKT invested 200 million USD in Smart Global Holdings (SGH), a U.S.-based AI data center integrated solutions company, and agreed to collaborate across the entire AI infrastructure sector, including AI data centers. SGH is a global AI data center integrated solutions specialist that designs, builds, and operates AI clusters composed of large-scale GPU servers, responsible for building large-scale AI clusters for global companies including Meta.

SKT plans to leverage its data center management know-how, immersion cooling technology, and other data center business capabilities within the group, combined with global partnerships, to target not only the domestic but also the overseas AI data center markets.

Development of the Global Telco AI Alliance (GTAA) and telco-specific large language models (LLM) is also underway. SKT, Deutsche Telekom, e&, Singtel, and SoftBank signed a definitive agreement in June to establish a joint venture, and SKT has completed the development of a Korean-language telco LLM, currently advancing its refinement and service application.

In the mobile business, as of the end of June, 5G subscribers reached 16.23 million, with the proportion of 5G customers exceeding 70%. Paid broadcasting subscribers numbered 9.6 million, and high-speed internet subscribers reached 7.05 million. Roaming customers in the second quarter increased by 37% year-on-year to approximately 1.23 million, showing a 46% increase in the first half compared to the same period last year. Last month, SKT launched 'T In-flight Wi-Fi,' the first service by a domestic carrier allowing Wi-Fi use on flights.

Within the enterprise sector, the Internet of Things (IoT) business saw a 29% increase in revenue year-on-year, and the cloud business grew by 28% compared to the same period last year, excluding one-time effects.

The number of A. (A-dot) subscribers reached 4.55 million as of the end of June, showing continuous growth from about 3.2 million at the end of last year. SKT plans to strengthen competitiveness through service revamps, including integrating a generative AI search engine into A-dot in the second half of the year. To this end, SKT has invested in the U.S.-based generative AI search specialist Perplexity and is jointly developing a Korean-optimized generative AI search engine.

T Universe subscribers surpassed 2.7 million as of the end of the second quarter. The dividend for the second quarter was confirmed at 830 KRW per share, the same as the first quarter.

SKT CFO Kim Yang-seop stated, “While solidifying the performance of wired and wireless businesses and improving profitability and efficiency, we plan to make visible progress as an AI company in the second half. Through an optimal balance of growth investment, financial structure improvement, and shareholder returns, we will maximize corporate value and shareholder benefits.”

Meanwhile, LG Uplus and KT are scheduled to announce their second-quarter earnings on the 7th and 9th, respectively. According to financial information provider FnGuide, KT's operating profit is estimated to be 553.9 billion KRW, and LG Uplus's 258.4 billion KRW, representing decreases of 3.9% and 10.3% year-on-year, respectively. KT's operating profit decline is expected due to a base effect from increased one-time gains of subsidiaries in the second quarter last year. LG Uplus's operating profit decrease is anticipated to be influenced by labor costs and intangible asset amortization expenses.

This content was produced with the assistance of AI translation services.