SKT, 11 times operating profit in the third quarter... Ulsan AIDC 2029 operation goal (comprehensive 2nd step)

(Seoul = Yonhap News) Reporter Park Hyeong-bin = SK Telecom [017670] announced on the 4th that its consolidated operating profit in the third quarter of this year was 552.3 billion won, an increase of 140.3% compared to the same period last year.

This is a result that reflects base effects such as a decrease in subscribers due to the hacking incident in the first half of last year and spending on compensation programs. Operating profit recovered to the previous year's level, recording 500 billion won for three consecutive quarters.

Sales increased by 13.1% to KRW 4.4973 trillion, and net profit turned into a surplus at KRW 411.8 billion.

SK Telecom explained that its performance is continuing to improve thanks to the recovery of its main telecommunications business and the growth of new artificial intelligence (AI) businesses.

In the wireless business, sales gradually recovered due to a shift in marketing strategy to focus on customer lifetime value (LTV). Wired sales grew 7.4% thanks to the increase in high-speed Internet subscribers.

Samsung Electronics' customer appreciation system and the launch of flagship devices such as the Galaxy Z Fold 8 and Apple's iPhone 18 Pro series are also believed to have had an impact on the increase in sales and average revenue per subscriber (ARPU).

In the AI ​​business, AIDC sales and AI service sales for companies and consumers (B2B, B2C) increased by 6.2% and 27.3%, respectively, compared to the same period last year.

However, AIDC sales decreased by 7.4% compared to the previous quarter. The gap in GPU infrastructure as a service (GPUaaS) sales that occurred during the transition to a new long-term contract appears to have had an impact.

SK Telecom established an AIDC business promotion system by launching SK Hyper and SK Horizon in July and August, respectively.

SK Telecom is responsible for overall AIDC business strategy, risk management, and global cooperation, SK Hyper is in charge of business development, and SK Horizon is in charge of infrastructure operation and expansion.

SK Horizon is building new data centers of approximately 180 MW (megawatts) in Ulsan and Seoul, and plans to gradually expand its submarine cable business.

SK Hyper is discussing contract conditions with potential customers, especially in Ulsan, and plans to begin infrastructure development based on the secured site once the contract is confirmed.

SK Telecom said in a conference call announcing its performance that day, "We have obtained construction permits for some capacity in Ulsan and are discussing specific business conditions with 3 to 4 global operators."

He then explained, “The goal is to secure customer demand for the initial operating volume by the first half of next year at the latest and gradually open the data center starting in the second half of 2029 through licensing and construction procedures.”

Regarding the large-scale investment needed to build AIDC, we reaffirmed our policy to actively utilize external capital attraction.

SK Telecom said, "It is true that the increased interest rate level is a factor affecting external financing for AIDC construction," but added, "If we secure sufficient business feasibility based on competitive customer contracts under the principle of executing investment after securing customer demand first, we will be able to attract the necessary external capital."

In the AI ​​service business, we are applying our proprietary AI foundation model to Adot and business AI services, and are promoting the establishment of a service ecosystem that combines communication and AI capabilities through participation in 'Everyone's AI'.

Meanwhile, the dividend for the third quarter was decided at 830 won per share, the same as the first and second quarters of this year.

However, as the investment burden is expected to increase due to the expansion of the AIDC business in the future, the next shareholder return policy will be decided by comprehensively considering financial soundness and investment demand.

SK Telecom plans to raise a significant portion of the investment required for AIDC development by attracting external funds, but it believes that a certain level of expansion of its own investment will be inevitable.

SK Telecom said, "We plan to manage investment efficiency and financial soundness by carefully reviewing the investment scale and execution period for each business, and the financing structure," and added, "The next shareholder return policy has just begun review, and will be decided after discussion with the board of directors and revisions and supplements."

He also explained that no specific decision has been made on whether to sell shares of Antropic, an American AI company that is pursuing an initial public offering (IPO).

SK Telecom said, “We plan to comprehensively consider the possibility of linking Antropic and our business, market conditions, and funds needed for growth investment.”

He added, “The direction of utilizing the financial resources secured through the sale of shares will be determined in a way that can most effectively contribute to enhancing shareholder value by comprehensively considering mid- to long-term investment plans, including AI data centers, actual capital requirements, and capital situation.”

Park Jong-seok, Chief Financial Officer (CFO) of SK Telecom, said, “We were able to achieve the results of recovery and growth at the same time based on the two axes of telecommunications and AI,” and added, “We will continue to strive to amplify synergies by connecting the telecommunications and AI businesses into one growth strategy.”