SKT posts weak Q4 and full 2019 earnings due to 5G costs, equity losses

2020.02.07 13:59:40

[Photo by SK Telecom Co.]이미지 확대

[Photo by SK Telecom Co.]

South Korea’s telecommunications giant SK Telecom Co. posted a 46.2 percent on-quarter decline in operating profit in the fourth quarter ended December last year due to the increase in expenditures for 5G business in its first year.

The company announced in a regulatory filing on Friday that its operating profit on a consolidated basis from October to December last year amounted to 162.5 billion won ($136.8 million), down 46.2 percent from the previous quarter and 27.9 percent from a year earlier. Sales fell 3.3 percent on quarter but rose 1.35 percent on year to 4.41 trillion won. It swung to a net loss of 45.2 billion won, reversing from a profit of 274.4 billion won in the previous quarter.

As of 1:43 p.m. on Friday, shares of SKT fell 0.66 percent to 226,500 won.

For the full 2019, SKT’s operating profit slipped 7.6 percent from a year ago to 1.11 trillion won. But its revenue gained 5.2 percent to 17.7 trillion won, reaching a record high thanks to the sound business of new growth engines including media and security.

이미지 확대
Net profit plunged 72.5 percent on year in 2019 to 861.9 billion won due to the poor performance of its chip making affiliate SK Hynix in which the telco company owns a 20.07 percent stake.

On a separate basis, SKT saw its revenue drop 2.5 percent to 11.4 trillion won due to the rise in subscribers of flat-rate promotional fee system. But the company said it expects a rebound in sales this year on the back of rising data usage and 5G service subscription as well as the steady sales increase in mobile phone sector.

Its internet service unit SK Broadband raked in 1.3 trillion won in revenue last year, up 0.7 percent on year thanks to the increase in premium service subscribers and content sales. The number of its IPTV subscribers grew 464,000 to 5.19 million in 2019.

[Photo by SK Telecom Co.]이미지 확대

[Photo by SK Telecom Co.]

The company’s security business including ADT Caps and SK Infosec delivered 153.5 billion won in operating profit, up 21.9 percent from a year ago. Revenue also jumped 17.4 percent to 1.2 trillion won.

SKT estimated its revenue this year would amount to 19.2 trillion won thanks to the growing 5G market and strong media, security and commerce businesses.

By Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]