Sk Telecom ((SKM)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The latest earnings call from SK Telecom showcased a positive outlook for the company, emphasizing growth in AI-related revenues and operational improvements. While concerns about the MNO business slowdown and a cautious approach to dividends were noted, the overall sentiment was favorable due to the robust performance in other areas.
Consolidated Revenue Growth
The company reported a consolidated revenue of KRW 17,940.6 billion, marking a 1.9% increase year-over-year. This growth was underpinned by sustained performance in fixed and mobile, enterprise, and AI business sectors, reflecting the diverse strength of SK Telecom’s operations.
AI-Related Revenue Increase
AI-related revenues surged by 19% year-over-year in 2024, driven by strategic investments in AI partnerships and the launch of new services such as SKT GPU-as-a-Service. This significant increase highlights SK Telecom’s commitment to expanding its AI capabilities and offerings.
Net Income Increase
Net income saw a notable rise of 25.6% year-over-year, totaling KRW 1,438.8 billion. This increase was attributed to business portfolio restructuring and enhancements in asset efficiency, illustrating the company’s effective management strategies.
Operational Improvements
SK Telecom achieved a 4% year-over-year rise in operating profit, thanks to major expense reductions and AI-driven cost efficiency measures. This operational improvement reflects the company’s focus on optimizing its business processes and leveraging technology for better outcomes.
AI Infrastructure Development
The company has ambitious plans to develop a hyperscale AI data center, leveraging the capabilities of SK Group. This initiative aims to position SK Telecom as an AI data center hub in the Asia Pacific region, signifying a long-term strategic vision.
MNO Business Slowdown
Despite the overall growth, the MNO business segment experienced a slight slowdown in top-line growth. However, customer-friendly roaming services provided some revenue growth, indicating potential areas for future improvement.
Marketing Cost Reduction
Marketing costs were strategically reduced in Q4, reflecting a stable yet competitive market environment. This followed the lifting of the handset subsidy ban, showcasing SK Telecom’s adaptability to market conditions.
Dividend Concerns
Despite improved earnings, SK Telecom maintained its dividend per share at the previous year’s level. This cautious approach reflects the uncertainties in the business environment, balancing shareholder returns with financial prudence.
Forward-Looking Guidance
Looking ahead, SK Telecom has set a consolidated revenue target of KRW 17.8 trillion for 2025, aiming for approximately 1% growth year-over-year. The company remains committed to continuous operational improvements and strategic investments in AI. Additionally, the dividend per share for 2024 was declared at KRW 3,540, ensuring stability in shareholder returns amid economic uncertainties.
In summary, SK Telecom’s earnings call highlighted a positive outlook driven by impressive growth in AI-related revenues and operational efficiencies, despite challenges in the MNO sector. The company’s forward-looking guidance reflects a strategic focus on AI and operational improvements, aiming to sustain growth and shareholder value.
