• Consolidated Revenue: KRW4,532.1 billion, up 2.9% year over year.

• Operating Income: KRW533.3 billion, up 7.1% year over year.

• Net Income: KRW280.2 billion.

• Non-Consolidated Revenue: KRW3,203.2 billion, up 1.7% year over year.

• Non-Consolidated Operating Income: KRW457 billion.

• Non-Consolidated Net Income: KRW222.4 billion.

• Data Center Revenue Growth: 14% year over year.

• 5G Subscribers: 16.58 million, accounting for 73% of the total subscriber base.

• Pay TV Subscribers: 9.62 million.

• Broadband Subscribers: 7.11 million.

• Enterprise Business Growth: 8% year over year.

• Cloud Business Revenue Growth: 30% year over year.

• Dividend Per Share (DPS) for Q3: KRW830.

• Warning! GuruFocus has detected 2 Warning Sign with FRA:B4V.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SK Telecom Co Ltd (NYSE:SKM) reported a 2.9% year-over-year increase in consolidated revenue for Q3 2024, driven by stable growth in roaming and B2B solution businesses.

• Operating income increased by 7.1% year over year, attributed to cost stabilization in marketing and depreciation.

• The company has established a strong AI Pyramid Strategy, focusing on AI data centers, AI B2B, and AI B2C to generate profit.

• Data center revenue grew by 14% year over year, indicating higher utilization and potential for short-term results in AI monetization.

• SK Telecom Co Ltd (NYSE:SKM) has a robust 5G subscriber base, with 16.58 million subscribers, accounting for 73% of the total subscriber base.

Negative Points

• Consolidated net income fell by about 9% year over year due to recognition of valuation losses from investment assets as non-operating expenses.

• Despite the positive market response to AI initiatives, the company faces challenges in monetizing AI services effectively.

• SK Telecom Co Ltd (NYSE:SKM) was not included in the core value index announced by the Korean Exchange, indicating potential concerns about market perception.

• The company faces competition in the AI B2C market, traditionally led by platform companies, which may impact its market share and profitability.

• There is uncertainty regarding the year-end dividend, as it depends on the closing of the fourth quarter earnings and board deliberation.

Q & A Highlights

Q: With the larger recognition of non-operating losses leading to a smaller net income, will this impact your year-end dividend? Also, can you explain the background of your Corporate Value-Up Plan disclosure? A: Yang Seop Kim, CFO, explained that the valuation losses are one-off non-recurring items and will not affect the dividend payout. The company remains committed to maintaining a stable dividend trend. Regarding the Corporate Value-Up Plan, it was disclosed to enhance corporate value and includes key indicators like ROE and AI Vision 2030. SK Telecom aims to improve ROE and maintain a high shareholder return ratio.