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Press Release
Net income of KRW452.5 billion was realized on total sales of KRW2.4 trillion. Net income and total sales increased 1% and 7% respectively over the 1st quarter of 2003.
Sales of wireless Internet service increased 48% over the 1st quarter of 2003, greatly contributing to the company’s cellular service sales.
These business results demonstrate the company’s ability continue it’s growth after the introduction of the Mobile Number Portability System
This first disclosure of business results since the introduction of the Mobile Number Portability System, demonstrates that SK Telecom continues to maintain its leadership position in the domestic mobile communications industry.
On April 29, SK Telecom announced that the company achieved a net income of KRW452.5 billion, and total sales of KRW2.4 trillion, for the 1st quarter of 2004. In addition, the EBITDA margin came to KRW1.63 trillion. SK Telecom’s net income and total sales increased 1% and 7% respectively over the same period in 2003. This is the first disclosure of business results after the introduction of the Mobile Number Portability System that has emerged as a "Hot Issue" in the domestic telecom market.
Due to the constant growth of new 010 prefix number subscribers, and value-added services users of wireless Internet and Coloring, the company’s total sales recorded KRW2.40 trillion increasing KRW157.9 billion over the KRW2.24 trillion in sales for the 1st quarter of 2003. In particular, the sales of wireless Internet services came to KRW391.6 billion, a 48% increase year on year. This greatly contributed to the company’s sales, and represented 18.1% of the overall cellular service revenue. Furthermore, the monthly average call traffic volume per user (Minutes of Usage), rose 5% to 195 minutes compared to 186 minutes recorded in the same period in 2003. This is one of the important factors that explain the remarkable business results for the 1st quarter of 2004.
An SK Telecom official revealed that even though the introduction of 010 cellular prefix numbers in accord with the Mobile Number Portability System could have negatively affected the company’s business performances, SK Telecom’s sales and net income increased. This demonstrates that the company’s cellular service has a competitive advantage in terms of service quality and brand power.
The EBITDA margin came to KRW1.63 trillion decreasing 3% year on year. This was due to a temporary increase in marketing expenses caused by the start of the mobile number portability system.
An SK Telecom official also revealed that marketing expenses rose 34% year on year to KRW477.8 billion. The extra expense was necessary in order to lock in existing high-quality subscribers in advance of the start of the mobile number portability system. The 1st quarter business results slightly exceeded the projections of securities firms’ analysts. This will eliminate any negative concern about the company’s operational results.
Shin Bae Kim, president of SK Telecom, commented, "We are pleased that the 1st quarter business results gave a clear indication that the company can keep growing in the uncertain business environment caused by the economic slowdown in Korea. By pursuing our new value creation management approach, we will continue to focus on solidifying our leading position in the entire market, by constantly developing and introducing new services that will thrive in this convergence era. This includes satellite digital multimedia broadcasting" (DMB).
SK Telecom’s debt ratio for the 1st quarter of 2004 came to 68.2%, decreasing 49.6% from the 117.8% recorded in the same period last year. This figure also shows a 5% decrease, compared to the 73.2% recorded at the end of 2003. On March 18, 2004, Moody’s upgraded SK Telecom’s credit rating to A3 which is also the national credit rating for Korea. This upgrade is attributed to the affirmative evaluation of the company’s excellent and stable financial structure.
On April 29, SK Telecom announced that the company achieved a net income of KRW452.5 billion, and total sales of KRW2.4 trillion, for the 1st quarter of 2004. In addition, the EBITDA margin came to KRW1.63 trillion. SK Telecom’s net income and total sales increased 1% and 7% respectively over the same period in 2003. This is the first disclosure of business results after the introduction of the Mobile Number Portability System that has emerged as a "Hot Issue" in the domestic telecom market.
Due to the constant growth of new 010 prefix number subscribers, and value-added services users of wireless Internet and Coloring, the company’s total sales recorded KRW2.40 trillion increasing KRW157.9 billion over the KRW2.24 trillion in sales for the 1st quarter of 2003. In particular, the sales of wireless Internet services came to KRW391.6 billion, a 48% increase year on year. This greatly contributed to the company’s sales, and represented 18.1% of the overall cellular service revenue. Furthermore, the monthly average call traffic volume per user (Minutes of Usage), rose 5% to 195 minutes compared to 186 minutes recorded in the same period in 2003. This is one of the important factors that explain the remarkable business results for the 1st quarter of 2004.
An SK Telecom official revealed that even though the introduction of 010 cellular prefix numbers in accord with the Mobile Number Portability System could have negatively affected the company’s business performances, SK Telecom’s sales and net income increased. This demonstrates that the company’s cellular service has a competitive advantage in terms of service quality and brand power.
The EBITDA margin came to KRW1.63 trillion decreasing 3% year on year. This was due to a temporary increase in marketing expenses caused by the start of the mobile number portability system.
An SK Telecom official also revealed that marketing expenses rose 34% year on year to KRW477.8 billion. The extra expense was necessary in order to lock in existing high-quality subscribers in advance of the start of the mobile number portability system. The 1st quarter business results slightly exceeded the projections of securities firms’ analysts. This will eliminate any negative concern about the company’s operational results.
Shin Bae Kim, president of SK Telecom, commented, "We are pleased that the 1st quarter business results gave a clear indication that the company can keep growing in the uncertain business environment caused by the economic slowdown in Korea. By pursuing our new value creation management approach, we will continue to focus on solidifying our leading position in the entire market, by constantly developing and introducing new services that will thrive in this convergence era. This includes satellite digital multimedia broadcasting" (DMB).
SK Telecom’s debt ratio for the 1st quarter of 2004 came to 68.2%, decreasing 49.6% from the 117.8% recorded in the same period last year. This figure also shows a 5% decrease, compared to the 73.2% recorded at the end of 2003. On March 18, 2004, Moody’s upgraded SK Telecom’s credit rating to A3 which is also the national credit rating for Korea. This upgrade is attributed to the affirmative evaluation of the company’s excellent and stable financial structure.