SK Telecom (US:SKM)2025-09-11 10:24Audit and Compliance - The independent auditor KPMG Samjong provided an unqualified audit opinion for the six months ended June 30, 2025[157]. - Ernst & Young Han Young issued unqualified audit opinions for the years ended December 31, 2023 and 2024, with critical audit matters related to revenue recognition timing for cellular services and goodwill impairment assessments[157]. - The internal accounting system audit fee for KPMG Samjong was 2,597 million Won for the six months ended June 30, 2025, with actual performance of 808 million Won[158]. - Ernst & Young Han Young charged 2,780 million Won for the internal accounting system audit for the year ended December 31, 2024, with actual performance matching the fee[158]. - The Audit Committee consists of four independent directors, focusing on financial oversight and compliance, with major activities reported for fiscal year 2024[169]. - The Audit Committee approved the operational status of the internal accounting management system and audit results for fiscal year 2024[170]. Corporate Governance - The Board of Directors consists of eight members, including two inside directors, five independent directors, and one non-executive director[162]. - The 41st General Meeting of Shareholders held on March 26, 2025, resulted in the election of Chang Bo Kim as an independent director and Dong Soo Kang as a non-executive director[163]. - The Board approved dividends for the fiscal year 2024 during its meetings in early 2025[165]. - The company has implemented a cumulative voting system for shareholder meetings, with electronic voting conducted during the 41st General Meeting[172]. - The Future Strategy Committee, comprising eight members, is tasked with deliberating the annual management plan and establishing mid- to long-term strategies[175]. Financial Performance - Total revenue for the six-month period ended June 30, 2025, was W8,792,477 million, a decrease of 1.2% from W8,896,970 million in the same period of 2024[316]. - Operating revenue for Q2 2025 was W4,338,760 million, a decrease of 1.9% compared to Q2 2024's W4,422,359 million[285]. - Operating profit for the six-month period ended June 30, 2025, was W905,644 million, down 12.5% from W1,035,997 million in the same period of 2024[285]. - Profit for the period in Q2 2025 was W83,247 million, a decline of 76.3% from W350,174 million in Q2 2024[287]. - Total comprehensive income for the six-month period ended June 30, 2025, was W549,290 million, down 32.1% from W808,955 million in the same period of 2024[287]. Shareholder Information - SK Inc. holds 30.57% of the total shares, maintaining 65,668,397 common shares as of June 30, 2025[175]. - The largest shareholder, SK Inc., has seen no change in shareholding ratio, remaining at 30.57% as of June 30, 2025[175]. - The company has a total of 243,441 shareholders, with 243,434 being minority shareholders, accounting for 99.9% of the total[183]. - The average share price in June 2025 was 54,847 Won, with a monthly transaction volume of 17,934,551 shares[185]. - The highest daily transaction volume in June 2025 reached 1,841,643 shares[185]. Employee and Director Compensation - The total number of employees as of June 30, 2025, is 5,626, with an aggregate wage for the year of 2024 amounting to 530,322 million Won[189]. - The aggregate amount paid to directors in 2025 was 4,007 million Won, averaging 572 million Won per director[193]. - Young Sang Ryu, the representative director, received total remuneration of 2,636 million Won, including a bonus of 1,820 million Won[197]. - The company granted stock options with a fair value of 269,107,551 Won to 17 directors and executives as of June 30, 2025[204]. Investments and Financial Position - The company reported a long-term and short-term loan balance of 83,498 million Won as of June 30, 2025, an increase from 56,633 million Won at the beginning of the period[226]. - The company reported a significant increase in cash and cash equivalents, rising to W2,353,159 million from W2,023,721 million, an increase of approximately 16.2%[282]. - Cash generated from operating activities for the six-month period in 2025 was W3,122,624 million, an increase of 17.2% from W2,663,879 million in 2024[291]. - The total cash and cash equivalents at the end of the period increased to W2,353,159 million in 2025 from W1,573,533 million in 2024, marking a growth of about 49.5%[292]. Regulatory and Legal Matters - SK Telecom was fined Won 16,829 million by the KFTC for inappropriate advertising practices related to wireless services[254]. - SK Telecom was fined Won 1,428 million for collusion in bidding practices confirmed by the KFTC[255]. - SK Telecom was fined Won 38,806 million for collusion among telecommunications companies regarding sales incentives[256]. - A correctional order was issued to SK Broadband with a fine of Won 78 million related to the telecommunications business report submitted for FY2022[264]. - SK Telecom faced a fine of Won 314 million for false, exaggerated, and deceptive advertising of broadcasting and telecommunications bundled services[264]. Cybersecurity and Operational Strategy - The Board is actively addressing a cybersecurity breach incident, with ongoing reports and remedial measures being discussed[165]. - The company implemented an "Information Security Innovation Plan" involving an investment of Won 700 billion over the next five years[258]. - SK Telecom suspended new subscriptions of mobile phone services until the stabilization of USIM card supply[258]. - The company reiterated its policy to fully compensate for user damages resulting from a cybersecurity breach incident[258]. Asset Management - As of June 30, 2025, total assets of SK Telecom amounted to W29,304,310 million, a decrease from W30,515,255 million as of December 31, 2024[282][283]. - Current liabilities decreased to W7,284,859 million from W9,224,278 million, while non-current liabilities increased to W10,048,053 million from W9,463,343 million[283]. - Long-term investment securities decreased to W1,777,448 million from W1,877,922 million, a decline of about 5.33%[282]. - The total balance of intangible assets decreased from W2,523,503 million as of June 30, 2024 to W1,916,080 million as of June 30, 2025, a decline of about 24%[349].