(LEAD) SK Telecom’s Q1 net profit down 61.5% on chip spinoff

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SEOUL, May 10 (Yonhap) — SK Telecom Co., South Korea’s largest mobile operator, said on Tuesday its first-quarter net profit fell 61.5 percent from a year earlier. previous year, mainly due to fallout from its semiconductor business last year.

The company said in a regulatory filing that its net profit for the January-March period was 220.3 billion won ($172.5 million), up from 572 billion won a year ago. Operating profit rose 15.5% to 432.4 billion won and sales rose 3.9% to 4.27 trillion won.

Earnings fell short of market expectations. Analysts’ average net profit estimate was 292.7 billion won, according to the survey by Yonhap Infomax, the financial data company of Yonhap News Agency.

The company said the drop in its year-on-year net profit was mainly due to the exclusion of stock gains in SK hynix Inc. following the spin-off of the chipmaking business in November last year.

In November, SK Telecom split into two companies, creating the new investment company SK Square with the aim of making aggressive investments in new technology and semiconductor companies.

SK Square oversees 16 of SK Telecom’s existing non-telecom and technology units, including chip-making subsidiary SK hynix, app market operator ONE Store, e-commerce platform 11Street and T Map Mobility.

The surviving SK Telecom is focusing on its traditional telecommunications business while advancing new businesses, including metaverse platforms.

SK Telecom said its mobile network operation and IPTV business led the growth in sales and operating profit. The company saw its 5G service subscribers increase by more than one million in the first quarter, and monthly active users of its ifland metaverse platform reached 1.35 million at the end of March.

Sales from the media-related business increased 10.3% and its enterprise business using its data center and cloud products also increased 17.4%, the company said.

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