SK Telecom Operating Profit Up 8.8%... "Full-Scale Revenue Drive with AI This Year" (Update)

2023 Annual and Q4 Earnings Announcement
Annual Revenue 17.6085 Trillion KRW...1.8% Increase
Business Diversification Including DC, Semiconductors, and LLM

SK Telecom's operating profit last year recorded approximately 1.75 trillion KRW, showing an 8.8% growth compared to the previous year. Sales from its representative artificial intelligence (AI) infrastructure data center business increased by 30% during the same period. This year, the company plans to diversify its AI business to achieve substantial revenue growth.

SKT announced on the 5th that its consolidated sales last year were 17.6085 trillion KRW, and operating profit was 1.7532 trillion KRW, marking increases of 1.8% and 8.8% respectively compared to the previous year. Net profit rose by 20.9% to 1.1459 trillion KRW. SKT explained that "the increase in net profit was due to the reflection of gains related to equity investments such as dividend income."

In the fourth quarter of last year, sales increased by 3.0% year-on-year to 4.5273 trillion KRW, and operating profit grew by 16.7% to 297.1 billion KRW.

Looking at SKT’s standalone performance excluding affiliates, sales reached 12.5892 trillion KRW and operating profit was 1.4559 trillion KRW, growing 1.4% and 10.2% respectively from the previous year.

SKT stated that it will deliver visible results in sales growth this year based on the 'AI Pyramid Strategy' directly devised by CEO Yoo Young-sang, as well as its AI infrastructure and technological capabilities. The company forecasts this year’s sales to be around 17.9 trillion KRW.

SKT expects that "AI data centers, AI enterprise, and AI semiconductors will rapidly expand sales this year alongside steep market demand growth, driving the growth of the AI business." In particular, the AI personal assistant 'A.Dot,' which added an iPhone voice call recording feature last year, plans to continuously add services this year to lead the AI agent market.

In the AI infrastructure sector, data center business sales grew by 30% compared to the previous year. SKT introduced an immersion cooling system that reduces maximum power consumption by nearly 40%, and plans to build new AI data centers this year while concretizing its entry into the global market.

SKT affiliate and AI semiconductor specialist company 'Sapeon' successfully commercialized the data center AI semiconductor 'X330' last November, which offers more than four times the computing power and twice the power efficiency compared to its predecessor. The company is accelerating its global market entry by discussing cooperation plans with global server manufacturer 'Supermicro.'

SKT is also pursuing a two-track multi large language model (LLM) strategy. Alongside its proprietary LLM 'A.Dot X,' it is preparing an AI platform that encompasses a diverse LLM lineup with leading domestic and international AI companies such as Entropic, OpenAI, Allganize, and Conan Technology.

The 'Enterprise AI Market' launched last month allows customers to select their preferred LLM from various options and easily apply AI to company tasks without coding knowledge. In the enterprise business, SKT continues to expand IoT line orders while discovering various AI items to foster growth. Relatedly, the cloud business saw sales increase by more than 30% year-on-year last year.

Kim Yang-seop, SKT’s Chief Financial Officer (CFO), said, "Last year, we laid the foundation for growth as an 'AI company' by strengthening our own AI capabilities and establishing global partnerships with leading AI companies worldwide. We will create visible results as a global AI company to maximize corporate and shareholder value."