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(2nd LD) SK Telecom's Q2 net nearly doubles on equity gain, 5G growth

All News 17:45 August 11, 2021

(ATTN: ADDS more details from para 11)

SEOUL, Aug. 11 (Yonhap) -- SK Telecom Co., South Korea's top wireless carrier, said Wednesday its second-quarter net income rose 84 percent on-year thanks to gains in its equity ties with chip-making affiliate SK hynix Inc. and growth in 5G users.

Net income stood at 795.7 billion won (US$689.2 million) in the April-June period on a consolidated basis, compared with 432.3 billion won a year earlier, according to a regulatory filing.

Operating income rose 10.8 percent to 396.6 billion won over the same period, while sales increased 4.7 percent to 4.81 trillion won.

SK Telecom Co.'s headquarters in central Seoul is seen in this undated file photo provided by the company. (PHOTO NOT FOR SALE) (Yonhap)

SK Telecom said equity gains totaled 657.6 billion won in the April-June period on the back of SK hynix's strong performance.

The country's No. 2 chipmaker last month reported that its net income for the second quarter reached 1.98 trillion won, up 56.5 percent from a year earlier. SK Telecom holds a 20 percent stake in the company.

The wireless carrier also cited growth in its mobile service for the upbeat second-quarter earnings.

Mobile service revenue stood at 2.56 trillion won in the April-June period, up 3 percent on-year.

As of end-June, SK Telecom had 7.7 million 5G subscribers, compared with 6.74 million at the end of March.

SK Telecom's new tech businesses, ranging from media to online commerce, also logged robust growth, with its sales reaching 1.58 trillion won, up 10.1 percent from the previous year as the mobile carrier prepares to split into two in November by creating a new investment-focused company.

The new company, tentatively named SKT Investment Co., will serve as the holding company of 16 units, including SK hynix, e-commerce subsidiary 11Street and app market operator ONE Store, and has plans to invest in semiconductor and other promising tech industries.

SKT Investment aims to increase its current estimated net asset value of 26 trillion won to 75 trillion won by 2025.

In a conference call, SK Telecom said it plans for the new company's semiconductor division to be valued at 40 trillion won by that year, followed by other existing businesses at a combined 25 trillion won and new investments at 10 trillion won.

SK Telecom expects SK hynix's value to rise to 200 trillion won by 2025 after the chipmaker completes its $9 billion acquisition of Intel's NAND memory business reached last year.

The surviving SK Telecom will focus on its traditional mobile network business as well as a new subscription service.

The mobile carrier said it will unveil the new service later this month, which aims to have 35 million subscribers by 2025.

As for the planned initial public offering for 11Street, the company did not provide a specific time frame but said it is planning for more investment and promotions, including the e-commerce company's collaboration with U.S. retail giant Amazon.com Inc. to be unveiled later this month.

SK Telecom has said that it is preparing to launch a service so that Amazon products can be directly purchased from 11Street.

Shares in SK Telecom fell 2.98 percent to 293,500 won, underperforming the broader KOSPI's 0.7 percent loss. The company reported its second-quarter earnings before the market closed.

yunhwanchae@yna.co.kr
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