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(2nd LD) SK Telecom Q1 net nearly doubles on equity gains, 5G growth

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SEOUL, May 11 (Yonhap) — SK Telecom Co., South Korea’s largest mobile carrier, said Tuesday its first-quarter net income nearly doubled on the back of increased equity gains and growth in its 5G subscriber base.

Net profit stood at 572 billion won (US$510.8 million), up 86.95 percent from a year earlier, while operating profit rose 29.04 percent to 388.8 billion won over the cited period, according to a company regulatory filing.

Sales in the January-March period increased 7.41 percent on-year to 4.78 trillion won.

The telecom operator said its bottom line got a boost based on growth in its 5G subscriber base and equity gains from its affiliates, including major memory chipmaker SK hynix Inc.

Equity gains totaled 322.5 billion won in the first quarter, compared with 140.9 billion won the previous year, the company said in a statement.

SK Telecom owns a 20 percent stake in SK hynix, which said late last month that its first-quarter net profit jumped over 50 percent on-year thanks to strong global demand for mobile and computer memory chips.

The mobile carrier added that its net income for the period also rose due to its sale of baseball team SK Wyverns to local retail giant E-Mart Inc. for 100 billion won.

SK Telecom’s mobile service revenue in the first quarter continued to grow, reaching 2.53 trillion won, up 1.9 percent from a year earlier.

The mobile carrier added 1.25 million 5G subscriptions in the January-March period, leading to a total of 6.74 million 5G users.

SK Telecom said in a conference call that it could achieve 10 million 5G subscriptions by the end of this year, given the current pace of new additions, higher than its initial goal of 9 million.

The company also vowed to complete last month’s spinoff plan by the end of this year. It plans to hold a board meeting for the plan by the end of June and relist the new entity by November.

SK Telecom is currently in the process of splitting into two companies, in which a new entity will become a holding company for its string of tech affiliates, including SK hynix, while the other will focus on its traditional telecom and wireless services.

Sales from the mobile carrier’s new tech businesses, which include media and commerce, stood at 1.52 trillion won in the first quarter, up 16.7 percent from the previous year.

The company plans to release a monthly subscription service that compiles its tech products from affiliates, akin to Amazon Prime from the U.S. retail and tech giant, in the second half of this year, aiming for 35 million subscribers and 1.5 trillion won in sales by 2025.

Shares in SK Telecom inched up 0.31 percent to 319,500 won, outperforming the broader KOSPI’s 1.23 percent decline. The company reported its first-quarter earnings before the market closed.

yunhwanchae@yna.co.kr
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