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 FEBRUARY 2004
-------------------
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- .)
================================================================================
February 6, 2004
RESULTS FOR THE YEAR
ENDED DECEMBER 31, 2003
*THE INFORMATION CONTAINED HEREIN IS BASED ON KOREAN GAAP.
[SK TELECOM]
________________________________________________________________________________
SEOUL, KOREA, FEBRUARY 6, 2004 - 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 YEAR ENDED
DECEMBER 31, 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).
[GRAPHIC SK Telecom]
CONTENTS
I. FINANCIAL HIGHLIGHTS.................................................. 1
II. FINANCIAL RESULTS..................................................... 2
1. INCOME STATEMENT
2. CAPITAL EXPENDITURE
3. BALANCE SHEET
III. OPERATING RESULT..................................................... 6
IV. APPENDIX (FINANCIAL STATEMENTS)...................................... 7
V. IR CONTACTS.......................................................... 9
[GRAPHIC SK Telecom]
I. FINANCIAL HIGHLIGHTS
SUMMARY OF INCOME STATEMENT
(KRW BN) 2003 2002 CHANGE Q4.'03 Q3.'03 CHANGE
-------- ---- ---- ------ ------ ------ ------
OPERATING REVENUE 9,520 8,634 10% 2,480 2,410 3%
OPERATING EXPENSES 6,440 5,950 8% 1,788 1,590 12%
OPERATING INCOME 3,081 2,684 15% 693 820 -16%
Operating margin 32.4% 31.1% 1.3%p 27.9% 34.0% -6.1%p
OTHER INCOME 250 272 -8% 53 55 -3%
OTHER EXPENSES 617 776 -21% 186 150 24%
ORDINARY INCOME 2,714 2,180 25% 560 725 -23%
NET INCOME 1,943 1,511 29% 433 510 -15%
Net margin 20.4% 17.5% 2.9%p 17.5% 21.2% -3.7%p
EBITDA 1) 4,693 4,198 12% 1,186 1,218 -3%
EBITDA margin 49.3% 48.6% 0.7%p 47.8% 50.6% -2.7%p
1) EBITDA = Operating income + Depreciation + R&D related depreciation within
the R&D expense
OTHER MAIN ITEMS
(KRW BN) 2003 2002 CHANGE Q4.'03 Q3.'03 CHANGE
-------- ---- ---- ------ ------ ------ ------
WIRELESS INTERNET SALES 1,320 731 81% 411 338 22%
% of Cellular revenue 15.5% 9.7% 5.8%p 18.5% 15.7% 2.8%p
MARKETING EXPENSES 1,579 1,623 -3% 451 379 19%
- Marketing commissions 1,217 1,183 3% 346 307 13%
- Advertising 361 440 -18% 105 72 47%
% of Revenue 16.6% 18.8% -2.2%p 18.2% 15.7% 2.5%p
CAPITAL EXPENDITURE 1,696 1,964 -14% 797 395 102%
% of Revenue 17.8% 22.7% -4.9%p 32.1% 16.4% 15.7%p
INTEREST-BEARING DEBT 4,351 4,455 -2% 4,351 5,252 -17%
Debt/Equity ratio 73.2% 80.5% -7.2%p 73.2% 95.0% -21.7%p
________________________________________________________________________________
1
[GRAPHIC SK Telecom]
II. FINANCIAL RESULTS
1. INCOME STATEMENT
A. OPERATING REVENUE
(KRW BN) 2003 2002 CHANGE Q4.'03 Q3.'03 CHANGE
-------- ---- ---- ------ ------ ------ ------
SIGN-UP FEES 177 230 -23% 44 43 3%
MONTHLY FEES 2,905 2,856 2% 734 731 0%
CALL CHARGES 3,666 3,395 8% 957 921 4%
VAS & OTHERS 425 330 29% 81 123 -34%
WIRELESS INTERNET SALES 1,320 731 81% 411 338 22%
% of Cellular service 15.5% 9.7% 5.8%p 18.5% 15.7% 2.8%p
TOTAL CELLULAR SERVICE 8,493 7,543 13% 2,228 2,156 3%
INTERCONNECTION REVENUE 1,027 1,092 -6% 253 254 -1%
L - > M 615 688 -11% 145 152 -5%
M - > M 412 404 2% 108 102 6%
OPERATING REVENUE 9,520 8,634 10% 2,480 2,410 3%
1) SIGN-UP FEES
- Sign-up fee in 2003 decreased due to the reduction in subscriber
addition.
2) CALL CHARGES
- Despite the tariff cut in January 2003, call charges in 2003 increased
due to the increase in MOU and subscriber numbers.
3) VAS & others
- VAS and others sales in 2003 increased due to the increased usage of
value-added services such as Color Ring. VAS and others sales in the
4th quarter decreased compared to the previous quarter due to the
reduction in Caller ID service fee.
4) WIRELESS INTERNET SALES
- Due to the continued increase in the usage of wireless internet, the
QoQ sales growth rate has accelerated from 11% in the 3rd quarter to
22% in the 4th quarter.
- Accordingly, wireless internet sales accounted for 18.5% of cellular
revenue in the 4th quarter.
5) INTERCONNECTION REVENUE
- LM revenue in 2003 decreased due to the reduction in interconnection
rate and KT's direct connection to HLR.
________________________________________________________________________________
2
[GRAPHIC SK Telecom]
B. OPERATING EXPENSES
(KRW BN) 2003 2002 CHANGE Q4.'03 Q3.'03 CHANGE
-------- ---- ---- ------ ------ ------ ------
LABOR COST 393 305 29% 105 95 10%
COMMISSIONS PAID 2,325 1,994 17% 663 578 15%
MARKETING COMMISSIONS 1,217 1,183 3% 346 307 13%
Initial commissions 252 346 -27% 59 54 9%
Monthly commissions 417 432 -4% 105 106 -1%
Retention commissions 548 405 35% 182 147 24%
OTHER COMMISSIONS 1,107 811 36% 318 271 17%
ADVERTISING 361 440 -18% 105 72 47%
DEPRECIATION 1,488 1,415 5% 462 365 27%
NETWORK INTERCONNECTION 738 738 0% 131 190 -31%
M - > M 525 494 6% 138 131 6%
M - > L 213 244 -13% (7) 59 -111%
LEASED LINE 302 267 13% 77 76 1%
OTHERS 1) 832 792 5% 244 215 14%
OPERATING EXPENSES 6,440 5,950 8% 1,788 1,590 12%
1) For details, please refer to non-consolidated statements of income in
appendix
1) LABOR COST
- Increase in 2003 labor cost was due to incentive bonus and wage
increase.
- The 4th quarter labor cost was higher compared to the previous quarter
because the wage increase for 2003 was finalized in the quarter and
retroactively recognized in the 4th quarter.
2) COMMISSIONS PAID
- Marketing commissions
Initial commissions in 2003 decreased due to the reduction in subscriber
addition and lower commission per subscriber. Monthly commissions in 2003
decreased due to reduction in the subscriber numbers which require monthly
commission payment to retail outlets. Retention commissions increased due
to the increased commission for handset changes in preparation for Mobile
Number Portability.
- Other commissions: The increase was mainly due to the increase in the
payment of Information Usage Fee to Content Provider as the wireless
internet usage increased.
3) ADVERTISING COST
- Relatively low advertising cost in the 3rd quarter resulted in higher
4th quarter number.
4) NETWORK INTERCONNECTION COST
- SKT's portion of Universal Service Fund (USF) was finalized in the 4th
quarter and 45.2 bn won('02. 9.5bn/'03. 35.7bn) of contribution
reimbursement to SKT was reflected in the 4th quarter
NOTE) SKT USF BREAKDOWN
2002 2003
---- ----
Expense recognition 90.2 bn won in 02 67.5bn won until 3Q
31.8bn won expected for 2003
Finalized amount 80.7 bn won for 2002 (Change in calculation method)
9.5 bn won difference 35.7bn won difference
Adjustment recognized in '03 4Q recognized in '03 4Q
________________________________________________________________________________
3
[GRAPHIC SK Telecom]
C. NON-OPERATING ITEMS
(KRW BN) 2003 2002 CHANGE Q4.'03 Q3.'03 CHANGE
-------- ---- ---- ------ ------ ------ ------
OTHER INCOME 250 272 -8% 53 55 -3%
Interest income 68 46 48% 22 15 45%
Commissions 120 103 17% 29 29 1%
Others 1) 62 123 -50% 3 11 -75%
OTHER EXPENSES 617 776 -21% 186 150 24%
Interest 376 305 23% 91 97 -6%
R&D contribution
& donations 90 126 -28% 29 20 47%
Others 1) 151 346 -56% 65 33 96%
1) For details, please refer to non-consolidated statements of income in
appendix
1) OTHERS IN OTHER EXPENSES
- Loss on disposal of Hanaro telecom securities(44.8 bn won) was
recognized in the 4th quarter.
2. CAPITAL EXPENDITURE
(KRW BN) 2003 2002 CHANGE Q4.'03 Q3.'03 CHANGE
-------- ---- ---- ------ ------ ------ ------
NETWORK 1,262 1,690 -25% 609 319 91%
95 A/B 96 175 -45% 54 15 267%
CDMA 2000 1X 641 1,186 -46% 281 150 87%
1X 605 1,036 -42% 259 147 77%
EV-DO 36 150 -76% 21 3 644%
WCDMA 204 -- N/A 114 89 28%
Backbone & others 321 329 -2% 160 66 144%
NON-NETWORK 435 274 59% 188 76 148%
Wireless Internet & marketing 262 221 19% 115 54 114%
General supporting 172 53 225% 73 22 230%
TOTAL CAPEX 1,696 1,964 -14% 797 395 102%
1) NETWORK
- Investment in base stations and repeaters for coverage and capacity
expansion decreased YoY.
2) NON-NETWORK
- The increase was mainly due to the increase in marketing relating
expenditure to strengthen distribution channels.
________________________________________________________________________________
4
[GRAPHIC SK Telecom]
3. BALANCE SHEET
(KRW BN) 2003.12 2002.12 CHANGE 2003.12 2003.9 CHANGE
-------- ------- ------- ------ ------- ------ ------
TOTAL ASSETS 13,376 12,721 5% 13,376 13,463 -1%
Current assets 3,461 2,747 26% 3,461 3,698 -6%
Cash & marketable securities 988 476 107% 988 1,176 -16%
Investment assets 1,763 3,132 -44% 1,763 1,910 -8%
Property & equipment 4,552 4,452 2% 4,552 4,288 6%
Intangible assets 3,600 2,390 51% 3,600 3,566 1%
TOTAL LIABILITIES 7,434 7,184 3% 7,434 7,933 -6%
Current liabilities 4,232 4,016 5% 4,232 4,578 -8%
Short-term borrowings 729 620 18% 729 1,459 -50%
Current portion of long-term
debt 1,364 921 48% 1,364 1,288 6%
Long-term liabilities 3,202 3,168 1% 3,202 3,355 -5%
Bond payable &
long-term borrowings 2,258 2,914 -23% 2,258 2,505 -10%
TOTAL SHAREHOLDERS' EQUITY 5,942 5,537 7% 5,942 5,530 7%
DEBT/EQUITY RATIO 1) 73.2% 80.5% -7.2%p 73.2% 95.0% -21.7%p
1) Debt/Equity Ratio = Interest-bearing debt / Shareholders' equity
* Interest-bearing debt = Short-term borrowings + Current portion of
long-term debt + Long-term borrowings & corporate bonds
1) CASH & MARKETABLE SECURITIES
- Managing cash balance to a minimum level at the end of 2002 in
consideration of the merger with SK IMT led to the increase in the
item at the end of 2003. At the end of 2002, SK IMT's cash balance was
about 960 bn won.
- Decrease in 4th quarter was due to the utilization of cash proceeds
(120 bn won) from Hanaro Telecom's CP.
2) INVESTMENT ASSETS
- The YoY decrease was due to the merger with SK IMT and the sell-off of
KT shares due to the share exchange with KT.
- The QoQ decrease was due to the sale of Hanaro Telecom securities.
3) INTANGIBLE ASSETS
- The YoY increase was due to the frequency usage right from the merger
with SK IMT.
________________________________________________________________________________
5
[GRAPHIC SK Telecom]
III. OPERATING RESULT
2003 2002 CHANGE Q4.'03 Q3.'03 CHANGE
---- ---- ------ ------ ------ ------
Subscribers ('000) 18,313 17,220 6% 18,313 18,019 2%
Net adds 1,094 2,040 -46% 294 162 82%
Activations 3,688 4,772 -23% 935 898 4%
Deactivations 2,595 2,731 -5% 641 736 -13%
Monthly churn rate 1.2% 1.3% -0.1%p 1.2% 1.4% -0.2%p
Average subscribers('000) 17,810 16,382 9% 18,135 17,932 1%
ARPU (KRW) 44,546 43,919 1% 45,590 44,804 2%
Sign-up fee 826 1,170 -29% 812 799 2%
Monthly fee & call charge 30,748 31,797 -3% 31,089 30,705 1%
VAS & others 1,988 1,681 18% 1,488 2,291 -35%
Wireless Internet 6,177 3,720 66% 7,558 6,288 20%
Interconnection 4,807 5,552 -13% 4,643 4,721 -2%
MOU (Minutes)
Outgoing 197 1) 191 3% 205 197 4%
Incoming 114 1) 115 -1% 115 112 2%
Subscribers by handset feature
('000)
1x (Including EV-DO) 14,424 9,936 45% 14,424 13,476 7%
EV-DO (Including June) 3,562 134 2564% 3,562 2,528 41%
June 1,678 66 2444% 1,678 1,243 35%
Color 10,570 4,729 124% 10,570 9,218 15%
Data ARPU by handset (KRW) 2)
2G 1,362 1,483 -8% 1,357 1,301 4%
1X(Including EV-DO) 7,293 5,892 24% 8,270 7,289 13%
Color 9,911 9,274 7% 10,587 9,653 10%
1) December 2003 MOU is estimate.
2) Excludes others in wireless internet sales such as financial enabler,
Solution/Platform sales, etc.
________________________________________________________________________________
6
[GRAPHIC SK Telecom]
IV. APPENDIX (NON-CONSOLIDATED STATEMENTS OF INCOME)
(KRW mn) 2003 2002 Q4.'03 Q3.'03
--------- --------- --------- ---------
Operating revenue 9,520,244 8,634,049 2,480,397 2,410,249
--------- --------- --------- ---------
Operating expenses 6,439,585 5,950,373 1,787,640 1,590,123
--------- --------- --------- ---------
Labor cost 392,701 304,644 104,753 95,038
Commissions paid 2,324,586 1,994,074 663,493 578,433
Advertising 361,114 440,024 105,485 71,652
Depreciation 1,488,165 1,414,627 461,514 364,748
Network interconnection 738,236 737,990 131,495 189,682
Leased line 302,288 266,804 77,027 75,983
R&D expenses 199,074 170,536 51,101 53,138
Rent 140,213 137,142 39,191 36,152
Frequency usage fees 129,525 119,216 32,146 33,136
Bad debt 19,536 15,357 8,287 5,426
Others 344,146 349,959 113,148 86,734
--------- --------- --------- ---------
Operating income 3,080,660 2,683,676 692,757 820,126
--------- --------- --------- ---------
Other income 250,448 272,459 53,285 54,663
--------- --------- --------- ---------
Interest income 68,259 46,274 21,545 14,859
Commissions 120,480 103,025 28,917 28,683
Gain on disposal of property
& equipment 2,709 3,242 1,260 728
Equity in earnings of affiliates -- 59,877 -- --
Foreign exchange & translation
gains 2,064 34,799 (9,512) 9,277
Others 56,936 25,242 11,075 1,116
--------- --------- --------- ---------
Other expenses 616,914 776,141 185,979 150,184
--------- --------- --------- ---------
Interest 375,609 304,509 91,368 96,859
R&D contribution & donations 90,200 125,987 29,464 20,071
Loss on disposal of property &
equipment 12,816 205,932 2,000 7,883
Equity in losses of affiliates 30,537 -- 12,473 1,881
Foreign exchange & translation
losses 1,065 6,020 (1,596) 1,885
Loss on impairment of investment
securities 20,343 44,896 1,626 --
Loss on disposal of investment
assets 45,175 51,532 44,996 --
Others 41,169 37,264 5,647 21,606
--------- --------- --------- ---------
Ordinary income 2,714,194 2,179,994 560,063 724,605
--------- --------- --------- ---------
Income before income taxes 2,714,194 2,180,498 560,063 724,605
--------- --------- --------- ---------
Income taxes 771,444 669,220 126,833 214,333
--------- --------- --------- ---------
Net income 1,942,750 1,511,278 433,230 510,272
========= ========= ========= =========
________________________________________________________________________________
7
[GRAPHIC SK Telecom]
IV. APPENDIX (NON-CONSOLIDATED BALANCE SHEETS)
(KRW mn) 2003 2002 2003.12 2003.9
---------- ---------- ---------- ----------
TOTAL ASSETS 13,375,959 12,721,218 13,375,959 13,462,839
---------- ---------- ---------- ----------
Current assets 3,460,706 2,746,991 3,460,706 3,698,425
---------- ---------- ---------- ----------
Cash & marketable securities 987,646 476,115 987,646 1,175,663
Accounts receivable - trade 1,438,836 1,290,475 1,438,836 1,390,129
Accounts receivable - other 811,496 809,616 811,496 913,105
Short-term loans 51,102 29,623 51,102 27,813
Inventories 8,024 10,718 8,024 6,062
Other 163,602 130,444 163,602 185,654
---------- ---------- ---------- ----------
Investment assets 1,763,359 3,132,330 1,763,359 1,909,838
---------- ---------- ---------- ----------
Investment securities 2) 1,418,734 2,806,963 1,418,734 1,524,573
Long-term loans 41,591 57,984 41,591 44,554
Guarantee deposits 246,004 221,815 246,004 239,707
Other 57,030 45,568 57,030 101,003
---------- ---------- ---------- ----------
Property & equipment 4,551,626 4,451,548 4,551,626 4,288,124
---------- ---------- ---------- ----------
Land 446,574 439,915 446,574 441,744
Building & fixture 840,237 778,833 840,237 790,199
Machinery 2,625,307 2,432,552 2,625,307 2,295,792
Vehicles & others 329,945 455,186 329,945 441,981
Construction in progress 309,564 345,063 309,564 318,408
---------- ---------- ---------- ----------
Intangible assets 3,600,268 2,390,350 3,600,268 3,566,451
---------- ---------- ---------- ----------
TOTAL LIABILITIES 7,434,121 7,184,271 7,434,121 7,933,160
---------- ---------- ---------- ----------
Current liabilities 4,231,974 4,015,859 4,231,974 4,577,949
---------- ---------- ---------- ----------
Accounts payable 1,117,835 1,587,532 1,117,835 713,179
Short-term borrowings 728,669 620,000 728,669 1,458,669
Income taxes payable 399,852 362,365 399,852 386,013
Accrued expenses 401,245 354,716 401,245 473,269
Current portion of long-term debt 1,364,264 920,745 1,364,264 1,287,749
Other 220,109 170,502 220,109 259,070
---------- ---------- ---------- ----------
Long-term liabilities 3,202,147 3,168,412 3,202,147 3,355,210
---------- ---------- ---------- ----------
Bond payable & long-term borrowings 2,258,276 2,913,922 2,258,276 2,505,427
Facility deposits 44,197 46,850 44,197 45,605
Accrued severance indemnities 63,663 45,861 63,663 73,975
Others 836,011 161,778 836,011 730,203
---------- ---------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY 5,941,838 5,536,948 5,941,838 5,529,679
---------- ---------- ---------- ----------
Capital stock 44,639 44,576 44,639 44,639
Capital surplus 2,915,964 2,884,385 2,915,964 2,916,150
Retained earnings 5,140,349 4,897,099 5,140,349 4,706,334
Capital adjustments (2,159,114) (2,289,112) (2,159,114) (2,137,445)
Treasury stock (2,047,103) (2,192,449) (2,047,103) (2,047,103)
Unrealized gain(loss) on valuation of
investment securities (115,752) (99,115) (115,752) (93,792)
Stock options 3,741 2,452 3,741 3,450
========== ========== ========== ==========
1) Cash & marketable securities : Cash & cash equivalent, marketable
securities & short-term financial instruments are included
2) Investment securities : Investments in affiliates with more than 20%
interest, listed companies & non-listed companies are included
________________________________________________________________________________
8
[GRAPHIC SK Telecom]
V. IR CONTACTS
IR OFFICE TITLE TELEPHONE EMAIL
------------ ----------------- ------------ --------------------
Tae-Jin Park Head of IR Team 02)2121-4212 tjpark@sktelecom.com
Jeong-Hwan Choi Senior Manager 02)2121-4213 choi72@sktelecom.com
Uk Jang Manager 02)2121-4215 ujang@sktelecom.com
JS Oh Assistant Manager 02)2121-4210 jsoh@sktelecom.com
Hannah Kim Assistant Manager 02)2121-4542 hannah@sktelecom.com
Thank you.
________________________________________________________________________________
9
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
Date: Feb 06, 2004