SK Telecom sharply increased second-quarter operating profit, helped by a base effect from last year’s costs related to SIM replacements and growth in its AI infrastructure business. AI data centre revenue kept rising, jumping more than 90 percent from a year earlier.

SKT said on Aug. 5 it posted consolidated revenue of 4.36 trillion won and operating profit of 566.0 billion won in the second quarter. Revenue rose 0.5 percent from a year earlier and operating profit increased 67.3 percent.

Net profit rose 459.8 percent to 466.0 billion won over the same period. Equity-method profit and loss swung to a 46.9 billion won profit in the second quarter from a 5.4 billion won loss a year earlier, affecting the rise in net profit. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 17 percent to 1.44 trillion won. EBITDA margin was 33.1 percent.

Standalone revenue fell 0.6 percent from a year earlier to 3.12 trillion won, but operating profit rose 70.5 percent to 427.7 billion won. SK Broadband revenue rose 3.6 percent to 1.16 trillion won and operating profit rose 44.3 percent to 132.5 billion won. The company said a base effect from last year’s SIM replacement-related costs and a focus on profitability led to improved results.

The AI business posted a growth rate of more than 10 percent, showing steep growth. AI data centre revenue was 136.2 billion won, helped by expanded data centre operations and contributions from undersea cable sales. It was up 92.5 percent from a year earlier and 3.6 percent from the previous quarter.

AI B2B and B2C revenue, including AI cloud, AI customer centres, AI factory, generative AI and A-dot, was 61.3 billion won, up 24.5 percent from a year earlier. It also grew 36.2 percent from the previous quarter due to expanded cloud orders.

SKT established SK Hyper, a wholly owned subsidiary, last month. SK Hyper will take charge of new business development, including securing data centre sites and power supply capacity in advance, substation operations, building transmission and distribution lines, and attracting global customers. It plans to gradually expand AI data centre capacity to 5 GW from 2029 and to further expand to a scale of 15 GW based on customer demand and other factors.

Second-quarter mobile subscribers fell 0.1 percent from a year earlier to 21.97 million. Wireless revenue fell 1.9 percent to 2.56 trillion won. Marketing costs rose 3.1 percent to 747.7 billion won.

In the fixed-line business, growth was led by an increase in high-speed internet subscribers. Fixed-line revenue rose 3.8 percent from a year earlier to 296.8 billion won. High-speed internet subscribers rose 2.4 percent to 7.348 million and IPTV subscribers rose 0.5 percent to 6.754 million.

Paid TV revenue, however, fell 0.8 percent to 471.1 billion won. Enterprise revenue, including dedicated lines and corporate solutions, also fell 3.6 percent to 280.1 billion won.

SKT's second-quarter dividend is 830 won per share. The total dividend is 176.8 billion won and the dividend record date is Aug. 31. The company will use at least 50 percent of adjusted consolidated net profit each year from 2024 to 2026 for shareholder returns.

Park Jong-seok (박종석), SKT's chief financial officer, said, "In the first half, we strengthened our fundamentals based on the telecoms business and laid the foundation for the AI data centre business to expand rapidly." He said, "Going forward, SKT will play a leading role in helping South Korea make a leap to become Asia's AI infrastructure hub."