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

SK Telecom Co., Ltd.

11,Euljiro2-ga Jung-gu
Seoul 100-999, 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 R		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 R

     (If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-               .)

 

 

July 25, 2005

* The information contained herein is based on Korean GAAP.

Seoul, Korea, July 25, 2005 – 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 June 30, 2005.

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).

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

I.

Financial Highlights

•

Summary of Income Statement

(KRW bn)		Q2. ’05				Q2. ’04				Change				Q2. ’05				Q1. ’05				Change
Operating revenue			2,527				2,384				6	%			2,527				2,412				5	%
Operating expenses			1,814				1,921				-6	%			1,814				1,797				1	%
Operating income			713				463				54	%			713				614				16	%
Operating margin			28.2	%			19.4	%			8.8	%p			28.2	%			25.5	%			2.8	%p
Other income			44				72				-39	%			44				56				-20	%
Other expenses			107				124				-14	%			107				123				-13	%
Ordinary income			651				411				58	%			651				547				19	%
Net income			467				299				56	%			467				368				27	%
Net margin			18.5	%			12.5	%			6.0	%p			18.5	%			15.3	%			3.2	%p
EBITDA1			1,103				868				27	%			1,103				984				12	%
EBITDA margin			43.7	%			36.4	%			7.3	%p			43.7	%			40.8	%			2.9	%p

•

Other Main Items

(KRW bn)		Q2. ’05				Q2. ’04				Change				Q2. ’05				Q1. ’05				Change
Wireless Internet sales			597				417				43	%			597				548				9	%
% of Cellular revenue			26.0	%			19.0	%			6.9	%p			26.0	%			25.0	%			1.0	%p
Marketing expenses			442				575				-23	%			442				436				1	%
- Marketing commissions			376				488				-23	%			376				380				-1	%
- Advertising			66				87				-24	%			66				56				17	%
% of Revenue			17.5	%			24.1	%			-6.6	%p			17.5	%			18.1	%			-0.6	%p
Capital expenditure			278				358				-22	%			278				90				207	%
% of Revenue			11.0	%			15.0	%			-4.0	%p			11.0	%			3.7	%			7.2	%p
Interest-bearing debt			3,596				4,299				-16	%			3,596				3,787				-5	%
Debt/Equity ratio			49.6	%			67.8	%			-18.2	%p			49.6	%			55.5	%			-5.9	%p

II.

Financial Results

1.

Income Statement

A.

Operating revenue

(KRW bn)		Q2. ’05				Q2. ’04				Change				Q2. ’05				Q1. ’05				Change
Sign-up fees			59				57				3	%			59				61				-4	%
Monthly fees			650				756				-14	%			650				667				-3	%
Call charges			894				875				2	%			894				825				8	%
VAS & others			98				89				11	%			98				94				5	%
Wireless Internet sales			597				417				43	%			597				548				9	%
% of Cellular service			26.0	%			19.0	%			6.9	%p			26.0	%			25.0	%			1.0	%p
Total cellular service			2,299				2,194				5	%			2,299				2,195				5	%
Interconnection revenue			228				190				20	%			228				217				5	%
L -> M			102				101				1	%			102				102				1	%
M -> M			126				89				41	%			126				116				9	%
Operating revenue			2,527				2,384				6	%			2,527				2,412				5	%

1)

Sign-up fees

     - The QoQ decrease was due to decrease in the number of new subscribers.

2)

Monthly fees

     - The YoY decrease was due to the tariff cut in monthly fee implemented in September 1, 2004, which was partly offset by increase in average subscriber number.

     - The QoQ decrease was due to increase in phone mail discount from increased usage, as phone mail discount is reflected in monthly fees. (Phone mail discount: ‘05 1Q. KRW 134.7 bn à ‘05 2Q. KRW 171.7 bn)

3)

Call charges

     - The YoY and QoQ increase was due to increase in number of business days and average number of subscribers.

4)

VAS & others

     - The YoY and QoQ increase was due to increase in the number of VAS subscribers.

5)

Wireless Internet sales

     - The YoY and QoQ increase was due to the continued adoption of high-end handsets and increased usage of new services and unlimited SMS tariff plan together with increase in data free tariff plan subscribers.

6)

Interconnection revenue

     - The YoY and QoQ increase was due to the increased call traffic.

     - ‘04 2Q interconnection revenue was relatively low because the full impact of interconnection rate adjustment amount for the 1st half of 2004 was reflected in the 2nd quarter of 2004 when the new interconnection rate was agreed on July 2004.

2

B. Operating expenses

(KRW bn)		Q2. ’05				Q2. ’04				Change				Q2. ’05				Q1. ’05				Change
Labor cost			74				96				-23	%			74				148				-50	%
Commissions paid			716				820				-13	%			716				714				0	%
Marketing commissions			376				488				-23	%			376				380				-1	%
Initial commissions			136				145				-6	%			136				142				-5	%
Monthly commissions			89				107				-17	%			89				85				5	%
Retention commissions			151				236				-36	%			151				152				-1	%
Other commissions			340				332				2	%			340				334				2	%
Advertising			66				87				-24	%			66				56				17	%
Depreciation1			390				405				-4	%			390				370				6	%
Network interconnection			240				232				4	%			240				218				10	%
M -> M			190				175				8	%			190				170				12	%
M -> L			50				57				-11	%			50				48				4	%
Leased line			95				90				6	%			95				97				-2	%
Others2			232				191				22	%			232				195				19	%
Operating expenses			1,814				1,921				-6	%			1,814				1,797				1	%

1) Labor cost

- The QoQ decrease in labor cost was due to incentive bonus paid in 1st quarter of this year.

2) Commissions paid

- Marketing commissions:

The YoY decrease was due to relatively high marketing commission level in the 2nd quarter of last year resulting from one-way mobile number portability(“MNP”) environment and severe competition in new 010 number market.

3) Advertising cost

- The QoQ increase was due to increase in advertising for promotion of new services.

4) Network interconnection cost

- The YoY and QoQ increase was due to increase in call traffic.

5) Leased line

- Leased line expense increased YoY as more lines were leased to accommodate the increase in wireless Internet traffic, and to enhance call quality after the implementation of MNP.

C. Non-operating items

(KRW bn)		Q2. ’05				Q2. ’04				Change				Q2. ’05				Q1. ’05				Change
Other income			44				72				-39	%			44				56				-20	%
Interest income			12				18				-35	%			12				11				6	%
Equity in earnings of affiliates			12				20				N/A				12				6				N/A
Others1			20				34				-39	%			20				38				-46	%
Other expenses			107				124				-14	%			107				123				-13	%
Interest			66				81				-19	%			66				66				-1	%
Equity in losses of affiliates			18				—				N/A				18				20				-11	%
R&D contribution & donations			19				21				-8	%			19				33				-43	%
Others1			5				23				-79	%			5				4				23	%

1) Equity in earnings of affiliates

- The QoQ increase was largely due to the increase in earnings of SK Telink and SK Communications.

2) Others in Non-Operating Income

- The QoQ decrease was mainly due to the high dividend income in 1Q 2005.

3) Equity in losses of affiliates

- The YoY increase was largely due to the net loss from SK Teletech and TU Media.

4) Others in Non-Operating expenses

- The YoY decrease was largely due to high impairment loss in long-term investment securities in the 2nd quarter of 2004.

2. Capital Expenditure

(KRW bn)		Q2. ’05				Q2. ’04				Change				Q2. ’05				Q1. ’05				Change
Network			230				270				-15	%			230				45				415	%
2G / 1X / EV-DO			101				238				-58	%			101				4				2,424	%
WCDMA			108				2				4,774	%			108				37				189	%
Backbone & others			21				30				-28	%			21				3				565	%
Non-Network			48				87				-46	%			48				46				4	%
Wireless Internet & marketing			35				54				-36	%			35				34				3	%
General supporting			13				34				-62	%			13				12				8	%
Total CapEx			278				358				-22	%			278				90				207	%

3. Balance Sheet

(KRW bn)		2005. 6				2004. 6				Change				2005. 6				2005. 3				Change
Total assets			13,758				13,490				2	%			13,758				14,108				-2	%
Current assets			3,983				3,648				9	%			3,983				4,101				-3	%
Cash & marketable securities			810				736				10	%			810				1,016				-20	%
Investment assets			2,012				1,997				1	%			2,012				2,112				-5	%
Property & equipment			4,333				4,351				0	%			4,333				4,408				-2	%
Intangible assets			3,430				3,493				-2	%			3,430				3,487				-2	%
Total liabilities			6,509				7,147				-9	%			6,509				7,282				-11	%
Current liabilities			2,246				3,384				-34	%			2,246				2,998				-25	%
Short-term borrowings			500				180				178	%			500				200				150	%
Current portion of long-term debt			—				1,398				N/A				—				499				N/A
Long-term liabilities			4,263				3,763				13	%			4,263				4,284				0	%
Bond payable & long-term borrowings			3,096				2,722				14	%			3,096				3,087				0	%
Total shareholders’ equity			7,249				6,343				14	%			7,249				6,826				6	%
Debt/Equity ratio1			49.6	%			67.8	%			-18.2	%p			49.6	%			55.5	%			-5.9	%p

1) Cash & marketable securities

     - QoQ decrease was due temporarily to the high balance as of March in consideration of dividend payment due in April.

2) Investment assets

- The QoQ decrease was due to the revaluation of investment securities such as POSCO shares

3) Total liabilities

- The QoQ decrease in debt to equity ratio was due to repayment of mature debt.

4) Total Shareholder’s equity

- Increase in shareholders’ equity was due to increase in retained earnings as of June 2005.

III. Operating Result

		Q2. ’05				Q2. ’04				Change				Q2. ’05				Q1. ’05				Change
Subscribers (‘000)			19,196				18,595				3	%			19,196				19,007				1	%
Net adds			189				157				21	%			189				224				-16	%
Activations			1,261				1,277				-1	%			1,261				1,323				-5	%
Deactivations			1,072				1,120				-4	%			1,072				1,099				-2	%
Monthly churn rate			1.9	%			2.0	%			-0.1	%p			1.9	%			1.9	%			-0.1	%p
Average subscribers(‘000)			19,099				18,540				3	%			19,099				18,892				1	%
ARPU (KRW)			44,105				42,861				3	%			44,105				42,557				4	%
Sign-up fee			1,025				1,022				0	%			1,025				1,082				-5	%
Monthly fee & call charge			26,962				29,316				-8	%			26,962				26,325				2	%
VAS & others			1,719				1,601				7	%			1,719				1,651				4	%
Wireless Internet			10,419				7,501				39	%			10,419				9,664				8	%
Interconnection			3,981				3,421				16	%			3,981				3,835				4	%
MOU (Minutes)1
Outgoing			196				194				1	%			196				185				6	%
Incoming			117				113				3	%			117				107				9	%
Subscribers by handset feature (‘000)
1x (Including EV-DO)			17,940				16,210				11	%			17,940				17,580				2	%
EV-DO (Including June)			7,416				5,398				37	%			7,416				7,022				6	%
June			4,801				2,777				73	%			4,801				4,055				18	%
Color			16,279				13,329				22	%			16,279				15,671				4	%
Data ARPU by handset (KRW)2
2G			2,242				1,604				40	%			2,242				2,074				8	%
1X(Including EV-DO)			10,622				7,644				39	%			10,622				9,730				9	%
Color			11,594				9,016				29	%			11,594				10,764				8	%

IV. Appendix (Non-Consolidated Statements of Income)

(KRW mn)		Q2. ’05				Q2. ’04				Change				Q2. ’05				Q1. ’05				Change
Operating revenue			2,527,150				2,383,994				143,156				2,527,150				2,411,935				115,215
Operating expenses			1,813,761				1,921,303				(107,543	)			1,813,761				1,797,473				16,288
Labor cost 1			74,335				96,349				(22,015	)			74,335				147,865				(73,530	)
Commissions paid			715,926				819,720				(103,794	)			715,926				713,836				2,090
Advertising			66,033				87,248				(21,215	)			66,033				56,319				9,714
Depreciation2			389,946				405,262				(15,316	)			389,946				369,582				20,364
Network interconnection			240,446				231,903				8,543				240,446				217,907				22,540
Leased line			95,190				90,190				5,001				95,190				96,867				(1,677	)
Rent			43,347				41,136				2,210				43,347				43,736				(390	)
Frequency usage fees			38,814				33,400				5,414				38,814				38,919				(105	)
Bad debt			20,100				—				20,100				20,100				14,867				5,233
Others			129,623				116,095				13,528				129,623				97,575				32,049
Operating income			713,390				462,691				250,699				713,390				614,463				98,927
Other income			44,185				72,307				(28,123	)			44,185				55,577				(11,392	)
Interest income			11,969				18,474				(6,505	)			11,969				11,341				628
Equity in earnings of affiliates			11,720				20,089				(8,369	)			11,720				6,446				5,274
Dividend income			227				1,263				(1,036	)			227				16,204				(15,977	)
Foreign exchange & translation gains			246				9,458				(9,212	)			246				391				(144	)
Others			20,022				23,023				(3,001	)			20,022				21,196				(1,174	)
Other expenses			106,879				124,316				(17,437	)			106,879				122,835				(15,956	)
Interest			65,623				80,691				(15,068	)			65,623				66,309				(686	)
R&D contribution & donations			18,949				20,505				(1,556	)			18,949				33,032				(14,083	)
Equity in losses of affiliates			17,554				—				17,554				17,554				19,644				(2,091	)
Foreign exchange & translation losses			161				9,483				(9,346	)			161				678				(517	)
Loss on impairment of investment securities			—				11,782				(11,782	)			—				—				—
Loss on disposal of investment assets, & property/equipment			1,609				1,400				209				1,609				1,936				(328	)
Others			2,984				456				2,528				2,984				1,236				1,748
Ordinary income			650,695				410,682				240,013				650,695				547,205				103,491
Income before income taxes			650,695				410,682				240,013				650,695				547,205				103,491
Income taxes			183,585				111,953				71,632				183,585				178,787				4,798
Net income			467,110				298,729				168,381				467,110				368,418				98,692

IV. Appendix (Non-Consolidated Balance Sheets)

(KRW mn)		2005. 6				2004. 6				Change				2005. 6				2005. 3				Change
Total assets			13,758,476				13,489,680				268,795				13,758,476				14,108,485				(350,009	)
Current assets			3,983,128				3,648,439				334,689				3,983,128				4,100,798				(117,670	)
Cash and marketable securities1			810,146				736,004				74,143				810,146				1,016,188				(206,042	)
Accounts receivable — trade			1,580,501				1,392,475				188,026				1,580,501				1,538,968				41,532
Accounts receivable — other			1,325,801				1,306,186				19,615				1,325,801				1,329,551				(3,750	)
Short-term loans			74,790				57,896				16,894				74,790				70,953				3,837
Inventories			11,479				9,444				2,035				11,479				10,603				876
Other			180,411				146,434				33,977				180,411				134,534				45,876
Investment assets			2,012,317				1,997,190				15,127				2,012,317				2,112,131				(99,814	)
Investment securities 2			1,766,552				1,573,213				193,339				1,766,552				1,876,472				(109,920	)
Long-term loans			19,139				33,099				(13,961	)			19,139				21,051				(1,913	)
Guarantee deposits			131,293				249,131				(117,838	)			131,293				132,086				(793	)
Other			95,333				141,746				(46,413	)			95,333				82,522				12,811
Property & equipment			4,333,405				4,351,219				(17,814	)			4,333,405				4,408,101				(74,696	)
Land			465,022				446,147				18,876				465,022				464,488				535
Building & fixture			1,157,493				815,295				342,198				1,157,493				1,152,884				4,609
Machinery			2,239,508				2,390,498				(150,990	)			2,239,508				2,341,547				(102,039	)
Vehicles & others			278,735				263,392				15,343				278,735				262,627				16,108
Construction in progress			192,647				435,888				(243,241	)			192,647				186,554				6,093
Intangible assets			3,429,626				3,492,833				(63,207	)			3,429,626				3,487,455				(57,829	)
Total liabilities			6,509,265				7,147,101				(637,837	)			6,509,265				7,282,202				(772,937	)
Current liabilities			2,246,208				3,384,399				(1,138,191	)			2,246,208				2,997,989				(751,781	)
Short-term borrowings			500,000				180,000				320,000				500,000				200,000				300,000
Accounts payable			654,358				823,824				(169,465	)			654,358				626,417				27,941
Income taxes payable			339,767				293,608				46,159				339,767				320,105				19,662
Accrued expenses			434,934				424,927				10,007				434,934				361,998				72,935
Current portion of long-term debt			—				1,397,807				(1,397,807	)			—				499,400				(499,400	)
Other			317,149				264,233				52,916				317,149				990,068				(672,919	)
Long-term liabilities			4,263,057				3,762,703				500,354				4,263,057				4,284,213				(21,156	)
Bond payable & long-term borrowings			3,095,743				2,721,504				374,239				3,095,743				3,087,500				8,243
Facility deposits			25,701				37,391				(11,690	)			25,701				30,073				(4,371	)
Accrued severance indemnities			87,995				89,046				(1,051	)			87,995				85,972				2,024
Others			1,053,618				914,762				138,856				1,053,618				1,080,669				(27,051	)
Total shareholders’ equity			7,249,211				6,342,579				906,632				7,249,211				6,826,283				422,928
Capital stock			44,639				44,639				—				44,639				44,639				—
Capital surplus			2,966,198				2,983,166				(16,969	)			2,966,198				2,964,664				1,533
Retained earnings			6,307,623				5,486,714				820,908				6,307,623				5,840,513				467,110
Capital adjustments			(2,069,249	)			(2,171,941	)			102,692				(2,069,249	)			(2,023,534	)			(45,715	)
Treasury stock			(2,047,105	)			(2,047,105	)			—				(2,047,105	)			(2,047,105	)			—
Unrealized gain(loss) on valuation of investment securities			(25,624	)			(129,131	)			103,507				(25,624	)			18,558				(44,182	)
Stock options			3,480				4,295				(815	)			3,480				5,013				(1,533	)