SK Telecom More Than Doubles Profit on Posco Stake Sale
SK Telecom Co. (017670), South Korea’s largest mobile-phone operator, more than doubled fourth-quarter profit after selling real estate and a stake in steelmaker Posco. (005490)
Net income jumped to 519.1 billion won ($477 million) from 195.5 billion won a year earlier, the Seoul-based company said in a regulatory filing today. It raised 727 billion won selling property and about 1 percent of Posco.
Sales rose 6 percent to 4.2 trillion won, helped by new Long-Term Evolution, or LTE, technology that boosts connection speeds. The completion of the LTE network rollout means the carrier will pare capital spending this year.
“LTE subscribers will continue to increase this year,” Kim Jang Won, a Seoul-based IBK Securities’ analyst, said ahead of the earnings statement. “That will eventually translate into a higher top line.”
South Korean telecommunications companies may also pare marketing this year after the regulator last month ordered temporary halts to the enrollment of new subscribers, Kim said. The Korea Communications Commission fined SK Telecom 6.9 billion won and banned it from signing up new customers for 22 days starting Jan. 31. KT (030200) Corp. and LG Uplus Corp. (032640) were also penalized.
SK Telecom’s fourth-quarter operating profit rose 38 percent to 544.6 billion won. The company was expected to report net income of 546.4 billion won, based on the average of 16 analyst estimates compiled by Bloomberg.
KT, the country’s second-largest mobile-phone, said last week that net income fell 55 percent drop to 93.6 billion won in the quarter. The carrier is also LTE networks.
SK Telecom rose 1.2 percent to close at 174,500 won in Seoul trading. The benchmark Kospi index declined 0.8 percent.
The company expects sales of 17.2 trillion won, compared with last year’s tally of 16.3 trillion won, it said. Capital spending will probably drop to 2.1 trillion won from 2.86 trillion won.
The carrier has 7.53 million LTE subscribers at the end of last year. It introduced the service in July 2011. The company offers a number of LTE-enabled smartphones, including Apple Inc.’s iPhone 5 and Samsung Electronics Co.’s Galaxy S III.
To contact the reporter on this story: Jungah Lee in Seoul at email@example.com
To contact the editor responsible for this story: Michael Tighe at firstname.lastname@example.org