1934 Act Registration No. 1-14418
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF OCTOBER 2003
-------------------
SK TELECOM CO., LTD.
(Translation of registrant's name into English)
99, Seorin-dong
Jongro-gu
Seoul, Korea
(Address of principal executive offices)
-------------------
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F [X] Form 40-F [ ]
(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes [ ] No [X]
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):82-_________________.)
================================================================================
[SK TELECOM LOGO]
OCTOBER 28, 2003
3RD QUARTER EARNINGS FOR THE
PERIOD ENDED SEPTEMBER 30, 2003
* THE INFORMATION CONTAINED HEREIN IS BASED ON KOREAN GAAP.
[SK TELECOM LOGO]
--------------------------------------------------------------------------------
SEOUL, KOREA, OCTOBER 28, 2003 -- SK TELECOM CO., LTD. (KSE: 017670, NYSE: SKM)
("SKT" OR "THE COMPANY"), THE LEADING WIRELESS TELECOMMUNICATIONS COMPANY IN
KOREA, TODAY ANNOUNCED THE RESULTS OF ITS OPERATIONS FOR THE THIRD QUARTER ENDED
SEPTEMBER 30, 2003.
--------------------------------------------------------------------------------
This material contains forward-looking statements with respect to the financial
condition, results of operations and business of SK Telecom and plans and
objectives of the management of SK Telecom. Statements that are not historical
facts, including statements about SK Telecom's beliefs and expectations, are
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results or performance of SK Telecom to be materially different from any future
results or performance expressed or implied by such forward-looking statements.
SK Telecom does not make any representation or warranty, expressed or implied,
as to the accuracy or completeness of the information contained in this
management presentation, and nothing contained herein is, or shall be relied
upon as, a promise or representation, whether as to the past or the future. Such
forward-looking statements were based on current plans, estimates and
projections of SK Telecom and the political and economic environment in which SK
Telecom will operate in the future, and therefore you should not place undue
reliance on them. Forward-looking statements speak only as of the date they are
made, and SK Telecom understates no obligation to update publicly any of them in
light of new information or future events. Additional information concerning
these and other risk factors are contained in SK Telecom's latest annual report
on Form 20-F and in SK Telecom's other filings with The U.S. Securities and
Exchange Commission (SEC).
2
[SK TELECOM LOGO]
CONTENTS
I. FINANCIAL HIGHLIGHTS ....................................................................... 4
II. FINANCIAL RESULTS .......................................................................... 5
1. INCOME STATEMENT
2. CAPITAL EXPENDITURE
3. BALANCE SHEET
III. OPERATING RESULT ........................................................................... 9
IV. APPENDIX (FINANCIAL STATEMENTS) ............................................................ 10
V. IR CONTACTS ................................................................................ 12
3
[SK TELECOM LOGO]
I. FINANCIAL HIGHLIGHTS
o SUMMARY OF INCOME STATEMENT
(KRW BN) Q3 03 Q2 03 CHANGE(%) Q3 02 CHANGE(%)
-------- ----- ----- --------- ----- ---------
REVENUE 2,410 2,387 1% 2,224 8%
OPERATING EXPENSES 1,590 1,570 1% 1,501 6%
OPERATING INCOME 820 817 0% 722 14%
Operating Margin 34% 34% 32%
NON-OPERATING INCOME 55 105 -48% 73 -25%
NON-OPERATING EXPENSES 150 143 5% 156 -4%
ORDINARY INCOME 725 779 -7% 639 13%
NET INCOME 510 551 -7% 444 15%
Net Margin 21% 23% 20%
EBITDA(1) 1,218 1,194 2% 1,110 10%
EBITDA Margin 51% 50% 50%
(1) EBITDA = Operating income + Depreciation + R&D related depreciation included
in R&D expense
o OTHER MAIN ITEMS
(KRW BN) Q3 03 Q2 03 CHANGE(%) Q3 02 CHANGE(%)
-------- ----- ----- --------- ----- ---------
WIRELESS INTERNET SALES 338 306 11% 193 75%
% of Cellular Revenue 16% 14% 10%
MARKETING EXPENSES 379 391 -3% 388 -2%
Marketing Commissions 307 300 2% 281 9%
Advertising 72 91 -22% 107 -33%
% of Revenue 16% 16% 17%
CAPITAL EXPENDITURE 395 330 20% 556 -29%
% of Revenue 16% 14% 25%
INTEREST-BEARING DEBT 5,252 4,893 7% 4,663 13%
Debt/Equity ratio (%) 95% 89% 73%
4
[SK TELECOM LOGO]
II. FINANCIAL RESULTS
1. INCOME STATEMENT
A. REVENUE
(KRW BN) Q3 03 Q2 03 CHANGE(%) Q3 02 CHANGE(%)
-------- ----- ----- --------- ----- ---------
SIGN-UP FEES 43 44 -3% 63 -31%
MONTHLY FEES 731 722 1% 729 0%
VOICE REVENUE 1,044 1,054 -1% 959 9%
CALL CHARGES 921 938 -2% 873 5%
VAS AND OTHERS 123 115 7% 86 44%
WIRELESS INTERNET SALES 338 306 11% 193 75%
% of Cellular Revenue 16% 14% 10%
----- ----- --- ----- ----
TOTAL CELLULAR REVENUE 2,156 2,126 1% 1,944 11%
----- ----- --- ----- ----
INTERCONNECTION REVENUE 254 261 -3% 280 -9%
L-M 152 154 -1% 177 -14%
M-M 102 107 -5% 103 -1%
----- ----- --- ----- ----
TOTAL REVENUE 2,410 2,387 1% 2,224 8%
----- ----- --- ----- ----
1) VOICE REVENUE
- Call charges decreased slightly due to more holidays in this quarter
(Korea Thanksgiving day and summer vacation period) compare to the
previous quarter but it had increased by 5% compare to the same period
of last year despite the tariff cut at the beginning of this year.
- VAS and Others sales increased 7% QoQ due to the increase in the usage
of value-added services such as Color Ring.
- The sales from "Free Tariff Scheme" increased by 25% QoQ to KRW 39bn.
2) WIRELESS INTERNET SALES
- Due to the increase in the number of Internet-enabled and high-end
handsets which generate higher wireless Internet ARPU (June, EV-DO,
Color, 1X handsets), wireless Internet sales increased 11% QoQ.
- Wireless Internet sales portion in total cellular revenue increased
steadily to 16% from 14% in the previous quarter.
5
[SK TELECOM LOGO]
B. OPERATING EXPENSES
(KRW BN) Q3 03 Q2 03 CHANGE(%) Q3 02 CHANGE(%)
-------- ----- ----- --------- ----- ---------
WAGE AND EMPLOYEE BENEFITS 95 69 38% 81 17%
COMMISSIONS 578 560 3% 498 16%
MARKETING COMMISSIONS 307 300 2% 281 9%
INITIAL COMMISSIONS 64 81 -20% 74 -14%
MONTHLY COMMISSIONS 106 102 4% 103 2%
RETENTION COMMISSIONS 137 117 17% 103 33%
FEES 193 197 -2% 168 15%
OTHER COMMISSIONS 78 63 24% 49 60%
ADVERTISING 72 91 -22% 107 -33%
DEPRECIATION 365 347 5% 365 0%
NETWORK INTERCONNECTION 190 236 -20% 198 -4%
M-M 131 136 -4% 124 6%
M-L 59 100 -41% 74 -20%
LEASED LINE 76 76 -1% 60 27%
OTHERS (1) 215 191 13% 193 11%
===== ===== == ===== ==
TOTAL 1,590 1,570 1% 1,501 6%
===== ===== == ===== ==
------------
(1) For details, please refer to income statements in appendix
1) WAGE AND EMPLOYEE BENEFITS
- Wage & Employee benefits increased due to incentive bonus payment to
employees in this quarter.
2) COMMISSIONS
- MARKETING COMMISSIONS: The 2% QoQ increase was due mainly to the
increase in retention commissions which include commission for handset
change and some promotional event cost to lock in quality subscribers.
- OTHER COMMISSION: The increase was mainly due to the increase in the
payment of Information Usage Fee to Content Provider as the wireless
Internet revenue increased.
3) DEPRECIATION
- The 5% QoQ increase was due to the increase in depreciating assets.
4) NETWORK INTERCONNECTION
- M-M: The 4% QoQ decrease was due to the decrease in MOU from the
previous quarter.
- M-L: The 41% QoQ decrease was due to the fact that the M-L expense in
the 2nd quarter included the share of KT114 directory service expenses
(KRW 40.6 bn for the loss from 1998~2001).
6
[SK TELECOM LOGO]
C. NON-OPERATING ITEMS
(KRW BN) Q3 03 Q2 03 CHANGE(%) Q3 02 CHANGE(%)
-------- ----- ----- --------- ----- ---------
NON-OPERATING INCOME 55 105 -48% 73 -25%
--- --- -- --- --
INTEREST INCOME 15 20 -26% 11 40%
INCOMING FEES 29 36 -20% 31 -8%
OTHERS(1) 11 49 -77% 31 -64%
--- --- -- --- --
NON-OPERATING EXPENSES 150 143 5% 156 -4%
--- --- -- --- --
INTEREST EXPENSES 97 101 -4% 78 24%
DONATIONS 20 21 -2% 22 -10%
LOSS ON EQUITY METHOD 2 5 - 0 -
OTHERS(1) 31 17 90% 55 -43%
------------
(1) For details, please refer to income statements in appendix.
1) INTEREST INCOME
- The QoQ decrease was due to the decrease in quarterly average balance
of cash & marketable securities.
2) OTHER NON-OPERATION INCOME
- The QoQ decrease was mainly due to the fact that there was dividend
income(KRW 25.6bn) from KT shares in the previous quarter.
3) INTEREST EXPENSES
- The QoQ decrease was due to the decrease in quarterly average balance
of interest-bearing debt.
4) OTHERS IN NON-OPERATING EXPENSES
- The QoQ increase was due to the increase in Loss on Disposal of
Property and Equipment from the sale of SK Bigs, the pro basketball
team, in the 3rd quarter.
2. CAPITAL EXPENDITURE
(KRW BN) Q3 03 Q2 03 CHANGE(%) Q3 02 CHANGE(%)
-------- ----- ----- --------- ----- ---------
Network 319 245 30% 460 -31%
95 A/B 15 19 -24% 66 -78%
CDMA 2000 1X 150 145 3% 290 -48%
1X 147 138 6% 285 -48%
EV-DO 3 7 -59% 5 -39%
WCDMA 89 0 0
BACKBONE AND OTHERS 66 81 -19% 105 -37%
Non-network 76 84 -10% 96 -21%
WIRELESS INTERNET 39 32 23% 79 -51%
GENERAL SUPPORTING 22 40 -45% 17 32%
OTHERS 15 12 19% 0
=== === == === ==
TOTAL CAPEX 395 330 20% 556 -29%
=== === == === ==
7
[SK TELECOM LOGO]
3. BALANCE SHEET
(KRW BN) SEPT 03 JUN 03 CHANGE(%)
-------- ------- ------- ---------
TOTAL ASSETS 13,463 12,993 4%
------ ------ --
CURRENT ASSETS 3,698 3,730 -1%
CASH AND MARKETABLE SECURITIES 1,176 1,186 -1%
INVESTMENT ASSETS 1,910 1,397 37%
PROPERTY AND EQUIPMENT 4,288 4,273 0%
INTANGIBLE ASSETS 3,566 3,592 -1%
------ ------ --
LIABILITIES 7,933 7,476 6%
------ ------ --
CURRENT LIABILITIES 4,578 3,885 18%
SHORT-TERM BORROWINGS 1,459 839 74%
CURRENT PORTION OF LONG-TERM DEBT 1,288 1,300 -1%
LONG-TERM LIABILITIES 3,355 3,591 -7%
LONG-TERM DEBT 2,505 2,754 -9%
------ ------ --
SHAREHOLDERS' EQUITY 5,530 5,516 0%
------ ------ --
DEBT/EQUITY RATIO(1) 95% 89%
------------
(1) Debt/Equity Ratio = Interest-bearing Debt / Shareholders' Equity
* Interest-bearing Debt = Short-term borrowings + Current portion of
long-term debt + Long-term borrowings and corporate bonds.
1) CASH AND MARKETABLE SECURITIES
- As of September 30, 2003, Cash and Marketable Securities was KRW 1,176
bn which include the remaining balance in the trust fund (KRW 346.6
bn) and Hanaro Telecom CP(KRW 120 bn) bought during the quarter .
2) INVESTMENT ASSETS
- The increase in investment securities was due mainly to the purchase
of POSCO shares.
3) CURRENT LIABILITIES
- The increase was due to the funding needs from the stock buyback and
the purchase of Hanaro Telecom CP.
5) DEBT/EQUITY RATIO
- As of September 30, 2003, D/E ratio rose to 95% from 89% in the
previous quarter due to increase in short-term borrowings during the
quarter.
8
[SK TELECOM LOGO]
III. OPERATING RESULT
Q3 03 Q2 03 CHANGE(%) Q3 02 CHANGE(%)
------ ------ --------- ------ ---------
SUBSCRIBERS ('000) 18,019 17,857 1% 16,997 6%
NET ADDS 162 229 -30% 534 -70%
ACTIVATIONS 898 910 -1% 1,294 -31%
DEACTIVATIONS 736 681 8% 761 -3%
Monthly Churn Rate(%) 1.4% 1.3% 1.5%
AVERAGE SUBSCRIBERS ('000) 17,932 17,743 1% 16,712 7%
MONTHLY ARPU (KRW) 44,804 44,841 0% 44,351 1%
SIGN-UP FEE 799 829 -4% 1,250 -36%
MONTHLY FEE & CALL CHARGE 30,705 31,199 -2% 31,968 -4%
VAS & OTHER 2,291 2,169 6% 1,707 34%
WIRELESS INTERNET 6,288 5,743 9% 3,847 63%
INTERCONNECTION 4,721 4,902 -4% 5,578 -15%
MOU (MINUTES)
OUTGOING 196(1) 201 -2% 192 2%
INCOMING 117(1) 116 1% 114 3%
SUBSCRIBER BY HANDSET FEATURE ('000)
1X(INCL. EV-DO) 13,476 12,375 9% 8,517 58%
EV-DO(INCL. JUNE) 2,528 1,433 76% NA NA
JUNE 1,243 829 50% NA NA
COLOR 9,218 7,695 20% 3,417 170%
WIRELESS INTERNET ARPU BY HANDSET (KRW)(2)
2G 1,301 1,351 -4% 1,375 -5%
1X (INCLUDING EV-DO) 7,289 6,978 4% 5,780 26%
COLOR 9,653 9,726 -1% 9,390 3%
------------
(1) August and September MOU are estimates.
(2) Excludes others in wireless Internet sales such as financial enabler,
Solution/Platform sales, etc.
9
[SK TELECOM LOGO]
IV. APPENDIX - INCOME STATEMENT
(KRW MN) Q3 03 Q2 03 Q3 02
-------- --------- --------- ---------
REVENUE 2,410,249 2,386,852 2,223,641
--------- --------- ---------
OPERATING EXPENSES 1,590,123 1,570,014 1,501,427
--------- --------- ---------
WAGE AND EMPLOYEE BENEFITS 95,038 68,984 81,086
COMMISSIONS 578,433 560,116 497,518
ADVERTISING 71,652 91,280 107,014
DEPRECIATION 364,748 346,723 365,324
NETWORK INTERCONNECTION 189,682 235,946 197,835
LEASED LINE 75,983 76,383 59,686
R&D EXPENSES 53,138 47,050 45,457
RENT 36,152 34,227 33,456
FREQUENCY USAGE FEES 33,136 32,674 29,943
BAD DEBT 5,426 2,093 32,709
OTHERS 86,734 74,537 51,398
OPERATING INCOME 820,126 816,838 722,215
--------- --------- ---------
NON-OPERATING INCOME 54,663 105,049 72,590
--------- --------- ---------
INTEREST INCOME 14,859 20,042 10,599
INCOMING FEES 28,683 35,798 31,198
GAIN ON DISPOSAL OF PROPERTY AND EQUIPMENT 728 440 492
GAIN ON EQUITY METHOD 0 0 10,655
FOREIGN EXCHANGE AND
TRANSLATION GAINS 9,277 11,090 1,768
OTHER 1,116 37,678 17,878
--------- --------- ---------
NON-OPERATING EXPENSES 150,184 142,516 155,852
--------- --------- ---------
INTEREST EXPENSES 96,859 100,648 78,054
DONATIONS 20,071 20,562 22,398
LOSS ON DISPOSAL OF PROPERTY AND EQUIPMENT 7,883 739 36,269
LOSS ON EQUITY METHOD 1,881 4,777 -
FOREIGN EXCHANGE AND TRANSLATION LOSS 1,885 224 6,864
LOSS ON IMPAIRMENT OF INVESTMENT SECURITIES - 2,300 400
LOSS ON DISPOSAL OF INVESTMENT ASSETS - 102 155
OTHER 21,606 13,164 11,712
--------- --------- ---------
ORDINARY INCOME 724,605 779,371 638,953
--------- --------- ---------
INCOME BEFORE INCOME TAXES 724,605 779,371 638,953
--------- --------- ---------
INCOME TAXES 214,333 228,798 194,935
--------- --------- ---------
NET INCOME 510,272 550,573 444,017
========= ========= =========
10
[SK TELECOM LOGO]
IV. APPENDIX - BALANCE SHEET
(KRW MN) SEPT 03 JUN 03
-------- ---------- ----------
TOTAL ASSETS 13,462,839 12,992,667
---------- ----------
CURRENT ASSETS 3,698,425 3,730,287
---------- ----------
CASH AND MARKETABLE SECURITIES 1,175,663 1,186,456
ACCOUNTS RECEIVABLE - TRADE 1,390,129 1,351,740
SHORT-TERM LOANS 27,813 25,720
ACCOUNTS RECEIVABLE - OTHER 913,105 1,006,839
INVENTORIES 6,062 6,668
OTHER 185,654 152,865
---------- ----------
INVESTMENT ASSETS 1,909,838 1,396,980
---------- ----------
LONG-TERM INVESTMENT SECURITIES 1,524,573 1,053,172
LONG-TERM LOANS 44,554 51,381
GUARANTEE DEPOSITS 239,707 238,132
OTHER 101,003 54,295
---------- ----------
PROPERTY AND EQUIPMENT 4,288,124 4,272,990
---------- ----------
LAND 441,744 440,187
BUILDING AND FIXTURE 790,199 797,014
EQUIPMENT 2,295,792 2,437,817
CONSTRUCTION IN PROGRESS 318,408 265,465
OTHER 441,981 332,507
---------- ----------
INTANGIBLE ASSETS 3,566,451 3,592,410
---------- ----------
-- --
LIABILITIES 7,933,160 7,476,260
---------- ----------
CURRENT LIABILITIES 4,577,949 3,885,024
--------- ---------
ACCOUNTS PAYABLE 713,179 664,114
SHORT-TERM BORROWINGS 1,458,669 838,669
INCOME TAXES PAYABLE 386,013 405,115
ACCRUED EXPENSES 473,269 431,718
CURRENT PORTION OF LONG-TERM DEBT 1,287,749 1,299,690
OTHER 259,070 245,718
---------- ----------
LONG-TERM LIABILITIES 3,355,210 3,591,237
---------- ----------
LONG-TERM DEBT 2,505,427 2,754,360
FACILITY DEPOSITS 45,605 43,676
ACCRUED SEVERANCE INDEMNITIES 73,975 67,391
OTHER 730,203 725,809
---------- ----------
SHAREHOLDERS' EQUITY 5,529,679 5,516,407
---------- ----------
CAPITAL STOCK 44,639 44,639
CAPITAL SURPLUS 2,916,150 2,916,150
RETAINED EARNINGS 4,706,334 4,734,158
CAPITAL ADJUSTMENTS -2,137,445 -2,178,540
TREASURY STOCK -2,047,103 -2,067,784
UNREALIZED LOSS ON VALUATION OF
LONG-TERM INVESTMENT SECURITIES -93,792 -113,916
STOCK OPTIONS 3,450 3,160
---------- ----------
11
[SK TELECOM LOGO]
V. IR CONTACTS
IR OFFICE TITLE TELEPHONE EMAIL
-------------- ----------------- ----------------- ---------------------
TAE-JIN PARK HEAD OF IR TEAM + 82-2) 2121-4212 tjpark@sktelecom.com
JUNG-WHAN CHOI SENIOR MANAGER + 82-2) 2121-4213 choi72@sktelecom.com
UK JANG MANAGER + 82-2) 2121-4215 ujang@sktelecom.com
MIN-YOUNG KIM ASSISTANT MANAGER + 82-2) 2121-4217 minykim@sktelecom.com
JS OH ASSISTANT MANAGER + 82-2) 2121-4210 jsoh@sktelecom.com
HANNAH KIM ASSISTANT MANAGER + 82-2) 2121-4542 hannah@sktelecom.com
THANK YOU.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SK TELECOM CO., LTD.
BY: /S/ SUNG HAE CHO
Name: Sung Hae Cho
Title: Vice President
IR Office
Date: October 29, 2003
13