Did SK Telecom’s Q1 net profit decline due to increasing corporate taxes?

Seoul, May 12 (NationPress) SK Telecom, the premier wireless service provider in South Korea, announced on Monday that its net profit for the first quarter has slightly decreased by 0.1 percent compared to last year, primarily due to an increase in corporate taxes.

The company's net profit for the three months ending in March fell to 361.6 billion won ($258.3 million), down from 361.9 billion won during the same period last year, according to a regulatory filing.

According to a company representative, “Corporate taxes rose in the first quarter due to the end of special depreciation provisions,” as reported by the Yonhap news agency.

In contrast, operating profit saw a significant rise of 13.8 percent, reaching 567.4 billion won in the January-March timeframe, up from 498.5 billion won the previous year. This growth was supported by robust revenue from its artificial intelligence sectors, including AI data centers (AIDC) and AI transformation (AIX), along with its fixed-line business.

SK Telecom noted that there is a steady increase in demand for its AI solutions among corporate clients, which is positively impacting its AIX segment.

Sales experienced a slight decline of 0.5 percent, dropping to 4.45 trillion won from 4.47 trillion won in the corresponding period.

In a separate announcement, the company reiterated its dedication to enhancing customer protection and restoring trust following a recent data breach.

With approximately 25 million users, representing about half of South Korea's market, SK Telecom has been under significant scrutiny after revealing a widespread leak of universal subscriber identity module (USIM) data affecting its entire user base in April.

To address these concerns, the company has upgraded its fraud detection system (FDS) to its highest operational level, proactively blocking suspicious authentication attempts.

Additionally, SK Telecom has automatically enrolled all eligible users in its USIM card protection service and is providing free USIM card replacements. As of May 11, 1.47 million users have completed the process.

The government-led investigation into the significant data breach at SK Telecom Co. is anticipated to release findings by the end of June, as stated by Minister of Science and ICT Yoo Sang-im.

This breach, which occurred on April 18, involved a major leak of USIM data, impacting SK Telecom's entire user base of 25 million. In response, a joint government-civilian panel has been established to conduct a thorough investigation.

“The panel is looking into how hackers accessed the system, what occurred, and how SK Telecom reacted to the event,” stated Yoo during a media briefing in Seoul, adding that the government will determine the penalties SK Telecom should face based on the panel's conclusions.