Q2 2021 SK Telecom Co Ltd Earnings Call
Hopefully, once again.
Communications, mno.
Today's conference call will provide consecutive interpretation and we have with us Executives from relevant business divisions, to help deepen your understanding before we begin, we want to remind you that all forward-looking statements are subject to change, depending on the macro economics and Market situations, let me now present our vehicle.
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That process that many investors are interested in SK Telecom, may be beneficial with the board's approval, on June 10th. The scene of ratio between the surviving company and the new company is around six, two, four, eight five, two one stock split was also decided to increase investment as disability and even expand the shareholder base.
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Two together in its catalog. Come on.
SK Telecom are surviving company plans to develop new growth, drivers in the areas of subscription, metaverse, and Enterprise based on its Core Business and 5 G. And whole media, the new company will be an investment company. Specialized in technology sectors. It aims to increase the current net asset value of 26 trillion one to 75 trillion won by 2025 through investment in high tech tech tech which income has
semiconductor tax form and Innovative new technology with high growth potential.
Now, let me discuss the Consolidated earnings highlights 422 of 2021.
One.
You young 14.7% and 0.8%. You want to Omit governance restructuring underway and all business divisions including
even though Investments and costs related to new ICT businesses increase
Income recorded 790, 5.7 billion, one hosting, an 84 percent growth ear, an ear and a 39.1 percent growth 2012. Thanks to equity income growth on SK hynix.
Julian twenty one point six billion won. As of the end of June, the number of subscribers, re 727 million representing more than 30% of the handset subscribers and contributing to the sustained, Revenue growth.
G and contact list communication. The platform is expected to be used for diverse purposes, including business, meetings events with many participants knowledge, sharing and social networking. We plan to grow this as a popular and we ask for your support.
The members of service will be refund based on customer info, and the new membership program will be introduced in Q4 that features a new earning points benefits. In addition to the existing immediate discount benefit, we will do our best to prepare for the launch of the new subscription service and the membership restructuring. So that they can Mark a meaningful New Beginning for SK Telecom posts in no time at all. When the younger children do they choose which ones would expect to get over it?
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Revenue.
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SK Broadband, achieve the largest side P, TV subscribers, and that adds and to to and the first talk of 2041, as a result, the number of paytv subscribers, increase 28.8.1 million as of the end of to to escape
Media has began regular broadcasting in April. It has focused on strengthening panel, competitiveness by increasing Channel, awareness and coverage and making content Investments as a results. In just three months, it enters a top 42 among approximately 300 channels.
in terms of,
At the end of June, that's keyboard.
And accelerated Investments and original content including Tracer, which will be released in December you arm, good HBO consent to handle kombucha.
We will continue to boost content competitiveness through various approaches as seen in the example of signing signing, an exclusive content distribution agreement with HBO.
Leo business areas such as Cloud home on man solution and converge Security on top of the growth of the existing too.
ADT caps them in a iris.
Security Services, ADT caps, ranked number one for managed Security Services for the first time in 2021 at Korea standard service Quality Index by the Korean standards Association. This achievement is attributable to our efforts to apply AI in the overall Security Services ranging from security camera. Operation active security security for our mentors and Smart Home Security.
ATC captain and aw, that's too close to call.
Into to and received is D partner of the Year based on the strength in partnership with AWS we are pursuing Cloud security, business opportunities in the financial and public sectors.
Irr for IPO into two and is currently preparing for the IPO in full swing woman. Come on Cinderella. Next is Commerce, e-commerce, which is on your computer, and you booked a times n Wild Mega gives you a number. I don't get all folks model for. Yeah, they don't give you a ship on Garden.
In the market further intensified e-commerce Market competition to which 11th, Street responded by strengthening competitiveness through, external Partnerships 11th Street started. The next day, delivery service in collaboration with Korea posts in the same day delivery service in partnership with SLX. You are
G to b. As in addition we are working to make sure that Amazon Global store will can open around the end of August. Now, we'll offer convenience and differentiated shopping experience in connection with SK Telecom prescription service.
SKT.
Increase the number of partner, mobile channels to minimize the negative impacts of reduced TV viewing, thanks to these efforts as kissed or maintained a high growth Trend into two as well.
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Moon.
By entering the good delivery market with the acquisition of ylp a logistics. IT company it also launched a designated driver service to gain a share in the stable designated driver service Market were three. Trillion won two men will be Latino
CM ability remains committed to Growing the business by offering differentiator services to users and cooperating with various stakeholders.
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A positive sign for successful, IPO one store, attracted investments, from Microsoft and Deutsche telekom Capital Partners. Thereby raising expectations for corporate value enhancement and building a foundation to enter the global market.
In addition to the activation of rock media, Korea's largest genre fiction publisher. One store will continue to make investments to secure IP, which will be utilized for various types of content such as films and games.
Since 2015 SK Telecom has maintained a total dividend size of more than 700 billion one with an annual DTS of 10001 starting from 2 to this year, we introduced quarterly dividend in accordance with the global standard yesterday dividend of 2501 per share for to to was paid out.
Out.
SK Telecom would like to increase transparency and predictability on the size of dividends by providing a guideline on dividends linked to business performance.
And then a is expected to maintain a stable cash flow after the spin-off. We would like to use 30 to 40 percent of the amount, which is a deduction of capex from a Visa, as a basis for dividend payment, for the next three years, including this year, it pizza is a cash flow generated from business. Operation and capex is essentially investment for business management. Equity investment, such as emanate will be excluded.
It our dividend formula is on a non-consolidated basis.
It's Emma, New Orleans. Continue to improve, based on 5G. Competitiveness, the free cash flow of the surviving company is expected to increase, which means that there is upside potential on dividend. Payout from John Connor.
Not only the owner, can identity that call talking.
The remaining process successfully and continue to improve the quality of our business.
Now, the Q and a session will begin, please, press 1 and 4. If you have any questions, questions will be taken according to the order, you have press the number one and forth, please press 1 and 5, if you want to cancel your questions,
So the first question will be provided by to help you from Merrill Lynch. Please go ahead.
So if I do some simple calculation, this would mean that there would be about 700 to 800 billion, one of basis for a dividend payout. So I wonder if there's any upside potential for your DPS level, because other companies in the market are expected to increase their GPS level and there is more visibility on that side. So I would like to get some more understanding on this part and you mentioned that in your dividend formula, there will be
Betta and capex. So as for the capex, is it based on your earnings presentation or is it old? Is it based on the financial statement? And I would also like to get some more visibility on the overall outlook for Ibiza and capex going forward because these will be linked to the dividend outside and you are paying out on a quarterly basis. So I like to get some more information on this and the second question, is related to the new company. You mentioned that you are
are planning to increase the net asset value to 75 trillion won and that is your Target. And there are many questions raised by investors saying that this target seems to be quite aggressive. So I wonder how you are going to deliver and try to meet this Target. In addition to what the CFO mentioned in the seminar in June, is there any other plan that you have devised to achieve this target?
Yeah, Midland, did you see that?
It's for our dividend Formula E. Beetle you can refer to our financial accounting. If it's a number and 4 capex, you can refer to the capex number, announcing our earnings presentation.
For the end of this year. But when they think about 30 to 40 percent of the amount, which is a deduction of capex from Evita, as you already mentioned, it will be in the range of 700 to 800 billion won. So based on this I expect that our DPS is going to be the ER or more than 10,000 won.
Do you want to go to dinner with me? That?
Cash flow generated from our business operation continuing on from 20.20 20, 20. In the first half of this year, we saw the able to continue to grow in a stable Manner and we expect that if it will continue to grow going forward as well.
Investment in order to maintain our Telecom business, we will continue to do our best to expand the 5G coverage, and improve the quality of the network. And at the same time, we will do our best to increase efficiency in capex, execution, by utilizing the joint network of 5G,
Let me now comment on your question. Regarding the net asset value Target for the new company.
It is our plan to increase the value of high next to 40 trillion won and increase the value of other businesses including platform to twenty five trillion won by 2025. And we also are aiming to attract about 10 trillion one of new investment, which will lead to additional net value, let that you grow.
Lat.
How do you do?
And we believe that the consolidation, which means that there will be more competitiveness in the non business as well.
China.
It's going to be equivalent to 40 trillion one.
You should want to join the road.
And we believe that these are sets have a lot of growth potential to realize going forward. So in these other areas, we believe that we can increase the net asset value to 25 trillion won.
Chile.
That I just mentioned, we will continue to collaborate with various Global Partners so that we can make these investments in future core technology, which will lead to additional 10 trillion, one of new asset value. Thank you.
Yeah, you don't get you a key Beach and contingent. Anita, what did you do?
I would like to ask questions. The first question is related to your business strategy, currently, not only not sick, but also coupon and neighbor are dumping into the Ott Market. As a result, the market competition has been intensifying. So, has there been any change to the wave strategy, in order to respond to this intensifying competition in the market? The second question is related to your subscription business ever since your last confession
Colder has been increased expectation on your subscription business. So what are the specific subscription business plans and strategies. Thank you.
Thank you very much.
SK Telecom is Chewbacca and could also be a pest.
Premium subscription packages.
Subscription service business. And ultimately it is our goal to develop this as an AI based digital marketing platform where various prescription products and customers will be matched in an optimal manner. That's cute.
Who looks like me?
For these products to our SK Telecom subscribers but also address the entire Korean population and by expanding our the scope of the subscription Services we are targeting 35 million 135 million subscribers by 2025 with a gmv sides of a trillion won.
Corporate to Sanford. And Hi. How are you?
Johanna.
We've has been enjoying the same subscriber growth Trend. Thanks to the popularity of original content and terrestrial broadcasting content, such as taxi driver, and Penthouse, season 3.
Korean nice to do. You waive is collaborating actively with various creators and producers. And in December this year we're going to release Tracer within Chauhan and tone hundred as lead actors.
A very large size content distribution agreement with HBO in an exclusive manner so that we can offer Game of Thrones and other HBO, dramas, and documentaries for the next for one year. And this is part of our efforts to increase our content competitiveness.
Content. Competitiveness at the end of June, let six monthly active users with 7.92 million, which was a 4% drop compared to compared to March, but waves Mau has increased to 3.9 million, which is a 6% increase from March, making the highest level
Company down. Thank you.
You want to see just a little bit.
And a reindeer.
Today.
Thank you for this opportunity. I would like to ask two questions. The first question is related to the dividends you mentioned in your guideline on the minimum dividend level. And you mentioned that the dividend size will be linked to a person's performance which means that, as you indicated there is upside potential. When I apply the dividend formula, to last year's dividend, I would say that. There's 39 percent of the difference between capex and Evita used for dividend payout and you mentioned that the range
Going to be between 30 and 40 percent. And if the percentage is closer to 40%, it will be very well received by investors. So as for you're moving on to the new companies dividend to plan, you mentioned at the CEO seminar that there will be additional five trillion. One of financial rating which is mainly going to be used for investment only or is it going to be also used for dividends in the future?
Irr. And as for the second question is, it is about the Eleventh Street in the new company, 11th Street takes up a sizable, share in the new company. So I believe that the earnings of the 11th Street will be quite important going forward. So what is your earnings outlook for the 11th Street and updates on your collaboration with Amazon? And any visibility on the timing of the IPO?
Yeah, stations incorrect imager. Your name. Someone comes out.
But let me first.
So as if it continues to increase and become more efficient, as you pointed out, yes, there is a potential for a dividend payout going forward. And as for your suggestion, we will do our best to maintain a balance between shareholder return and stable investment. And this will be discussed at the board as well. Thank you.
T 2.
And as for the new company's dividend policy, the spin-off has not been completed yet, and there will be further discussions with the members of the new board board of the new company. So I like to ask for your understanding on this part. And as was communicated previously, the new company will be an investment company. So we do not consider any regular dividend payment. However, if there is any good occasion such as an exit or value Harvest, then we may consider other options such as
Special dividend.
And moving on to your question regarding the IPO, timing of 11th Street, as you may understand given the nature of e-commerce business, it is very crucial to maintain a balance between learning performance and growth for 11th street. We will continue to find ways to differentiate our services in collaboration with Amazon for a cross-border purchase experience. And there will be major promotions and large-scale Investments planned and these will lead to more
Differentiation and this will. Once again, provide a
Good basis for successful IPO.
Leo.
Thank you.
Hawks you tragedy money? Searching guy all that. Yeah.