SK Telecom grows Q2 profit 3.7%

Dylan Bushell-Embling
04 Aug 2011
Daily News

SK Telecom today reported a 3.7% growth in Q2 profit to 465.4 billion won ($439.8 million), as it made progress developing a separate platforms business.

The South Korean incumbent said revenue increased 5.7% year-on-year to $4.04 trillion won, while platform and new business sales climbed 84.9%.

CFO Ahn Seung-Yun said the segment's performance reflects the company's goal of “spinning off its platform business and nurturing it [a] strong growth engine.”

Plans to combine SK Telecom's mobile content and applications projects into a separate platforms business were first announced in June. The company aims for an October completion date.

SK Telecom projects it is on track to hitting its goal of 10 million smartphone subscribers by the end of the year, after reaching 7.5 million at the end of June.

The more lucrative smartphone subscribers helped the company improve its ebitda margins 0.7% year-on-year to 31.3%.

But growing operating costs, including depreciation associated with expanded network investments, weighed on bottom-line growth during the quarter.

Analysts toldDow Jones they expect SK Telecom's earnings to weaken over the rest of the year due to heavy spending on its LTE network - which launched in July - and its planned tariff cuts due in September.

Last month, SK Telecom launched mobile education platform T Smart Learning.

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