Expect Stable Revenue Growth from SK broadband
The author is an analyst of KB Securities. He can be reached at joonsop.analyst@kbfg.com. -- Ed.
2Q22 review: OP growth of KRW459.6bn (+16.2% YoY)
— SKT posted 2Q22 consolidated revenue of KRW4.29tn (+4.0% YoY) and OP of KRW459.6bn (+16.2% YoY), both meeting the market consensus (KRW4.31tn revenue; KRW465.1bn OP).
— SKT standalone OP rose 16.0% YoY to KRW380.9bn; SK broadband standalone OP increased 21.8% YoY to KRW78.0bn.
— While the increase in SKT standalone OP was largely fueled by declines in marketing costs (-5.8% YoY) and D&A (-3.4% YoY), SK broadband earnings were driven by top-line growth, with no. of paid broadcasting subscribers up 0.8% QoQ and B2B revenue up 3.3% QoQ.
Mobile earnings growth led by increase in no. of 5G subscribers, cost controls
— Mobile revenue rose (+1.1% QoQ, +2.2% YoY), with ARPU up amid a rise in no. of 5G subscribers (+7.4% QoQ; 11.68mn as of end-2Q22).
— With 5G-related marketing costs from 2019 now fully booked, standalone marketing costs fell 5.8% YoY (+1.9% QoQ on increase in ad expenses). As 5G services are maturing, we believe SKT will not be aggressive in attracting more 5G subscribers.
— D&A declined 3.4% YoY (-1.2% QoQ) with capex stabilization.
— Roaming revenue—a key earnings driver in 2Q22—should continue to contribute to Mobile revenue growth in 2H22.
Expect stable revenue growth from SK broadband
— SK broadband revenue should grow as utilization at datacenters gradually ramps up (datacenters in Gasan-dong and Ilsan opened in July 2021). We note that revenue from datacenters has increased for six straight quarters (for 2Q22, revenue rose 37% QoQ).
— No. of paid broadcasting subscribers increased 0.8% QoQ, led by IPTV subscribers (+1.3% QoQ).