SEOUL, October 30 (AJP) - South Korea’s largest mobile carrier, SK Telecom, reported a steep decline in profit and a swing to a net loss in the third quarter on Thursday, as the fallout from one of the country’s largest personal data breaches continued to batter its business and reputation.
The net loss ended the company's streak of consecutive quarterly profits that had continued since 2000.
The company said its consolidated operating profit plunged 90.9 percent from a year earlier to 48.4 billion won, or about $35.7 million. Quarterly revenue fell 12.2 percent to 3.98 trillion won ($2.93 billion). The bottom line turned negative, with a net loss of 166.7 billion won ($122.9 million), compared with a profit during the same period last year.
In a sign of internal accountability, SK Group removed CEO Yoo Young-sang from management roles. He was replaced by Jung Jae-heon, the company’s president and head of external cooperation. Jung, a former judge born in 1968, is expected to bring a steadier hand as the company navigates regulatory and reputational challenges.
As of 10:45 a.m., SK Telecom shares were trading at 52,650 won, down 1,450 won, or 2.68 percent, from the previous session.
SK Telecom said it would not pay a dividend for the third quarter — an uncommon move for one of South Korea’s most established blue-chip firms.
The financial blow in the third quarter stems largely from the large-scale hacking incident disclosed in April, which exposed customer information and triggered a wave of cancellations. To stem the damage, SK Telecom rolled out extensive countermeasures, including compensation programs for affected users and rate reductions, all of which eroded earnings.
The company also faced a 134.8 billion won ($99.3 million) regulatory fine imposed by the Personal Information Protection Commission — one of the largest penalties ever levied in South Korea for a data breach.
Even as the crisis weighed on its bottom line, SK Telecom’s core telecom operations began showing signs of recovery after a turbulent second quarter, the company said. The company added roughly 240,000 5G subscribers from the previous quarter, bringing the total to 17.26 million, while its high-speed internet division returned to net growth.
The company’s investments in artificial intelligence offered the strongest source of optimism. Revenue from AI-related businesses surged 35.7 percent year-over-year, with its data center division generating 149.8 billion won.
Its broader AI transformation initiative, known as AIX, recorded 55.7 billion won in revenue. SK Telecom is doubling down on the sector, breaking ground on a new AI data center in Ulsan with Amazon Web Services and partnering with OpenAI to establish another facility in the country’s southwest.
“The company will prioritize restoring customer trust and seek to turn this crisis into an opportunity by producing tangible results in our AI business,” Kim Yang-seop, SK Telecom’s chief financial officer, said in a statement.
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