SK Telecom's profit plunges in 2019 on equity losses, costs

SK Telecom Co., South Korea's top mobile phone operator, said Friday its net income plunged 72.5 percent last year from a year earlier due to reduced equity gains from its chip-making affiliate.

In a regulatory filing, SK Telecom reported a net income of 861.9 billion won ($725.9 million) last year, down from 3.1 trillion won in 2018, on a consolidated basis.

The company said that operating profit for the year fell 7.6 percent on-year to 1.11 trillion won, although its annual revenue increased 5.2 percent on-year to a record 17.74 trillion won.

SK Telecom attributed its profit decline to equity ties with chipmaking affiliate SK hynix Inc.

SK Telecom holds a 20 percent stake in SK hynix, which reported poor 2019 earnings due to a slump in the memory chip industry.

Its increased spending for 5G service marketing and infrastructure buildup also dragged down the bottom line, according to SKT. The company began its commercial 5G service in April.

In the fourth quarter, SK Telecom posted a net loss of 45.2 billion won, turning from a profit of 474.5 billion won a year earlier.

Its operating profit declined 27.8 percent on-year to 162.5 billion won in the October-December period, but revenue rose 1.4 percent on-year to 4.41 trillion won over the cited period. (Yonhap)