SK TELECOM CO.,LTD
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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 2005

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  þ                    Form 40-F  o

     (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  o                    No  þ

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

 

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January 26, 2005

Results for the Quarter
ended December 31, 2004

* The information contained herein is based on Korean GAAP.

(SK TELECOM LOGO)

Seoul, Korea, January 26, 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 quarter ended December 31, 2004.

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.       1  
II.       2  
               
               
               
III.       6  
IV.       7  
V.       9  

 

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I. Financial Highlights

• Summary of Income Statement

                                                 
(KRW bn)   2004     2003     Change     Q4.'04     Q3.'04     Change  
Operating revenue
     9,704       9,520       2 %     2,485       2,434       2 %
Operating expenses
     7,344       6,440       14 %     1,890       1,823       4 %
Operating income
     2,360       3,081       -23 %     594       611       -3 %
Operating margin
     24.3 %     32.4 %     -8.0 %p     23.9 %     25.1 %     -1.2 %p
Other income
     237       250       -5 %     47       49       -6 %
Other expenses
     481       617       -22 %     160       107       49 %
Ordinary income
     2,116       2,714       -22 %     481       553       -13 %
Net income
     1,495       1,943       -23 %     348       396       -12 %
Net margin
     15.4 %     20.4 %     -5.0 %p     14.0 %     16.2 %     -2.2 %p
EBITDA 1)
     4,059       4,693       -14 %     1,090       1,038       5 %
EBITDA margin
     41.8 %     49.3 %     -7.5 %p     43.9 %     42.7 %     1.2 %p

1)   EBITDA = Operating income + Depreciation (including R&D related depreciation)

• Other Main Items

                                                 
(KRW bn)   2004     2003     Change     Q4.'04     Q3.'04     Change  
Wireless Internet sales
     1,823       1,320       38 %     544       470       16 %
% of Cellular revenue
     20.6 %     15.5 %     5.1 %p     23.9 %     21.2 %     2.7 %p
 
                                                
Marketing expenses
     1,860       1,579       18 %     372       436       -15 %
- Marketing commissions
     1,532       1,217       26 %     291       366       -20 %
- Advertising
     329       361       -9 %     80       69       16 %
% of Revenue
     19.2 %     16.6 %     2.6 %p     15.0 %     17.9 %     -2.9 %p
 
                                                
Capital expenditure
     1,607       1,696       -5 %     726       416       75 %
% of Revenue
     16.6 %     17.8 %     -1.3 %p     29.2 %     17.1 %     12.1 %p 
 
                                                
Interest-bearing debt
     3,790       4,351       -13 %     3,790       4,216       -10 %
Debt/Equity ratio
     53.2 %     73.2 %     -20.1 %p     53.2 %     62.5 %     -9.3 %p

 

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II. Financial Results

1. Income Statement

A. Operating revenue

                                                 
(KRW bn)   2004     2003     Change     Q4.'04     Q3.'04     Change  
Sign-up fees
     198       177       12 %     46       42       10 %
Monthly fees
     2,940       2,905       1 %     685       744       -8 %
Call charges
     3,528       3,666       -4 %     906       870       4 %
VAS & others
     355       425       -16 %     91       91       -1 %
Wireless Internet sales
     1,823       1,320       38 %     544       470       16 %
% of Cellular service
     20.6 %     15.5 %     5.1 %p     23.9 %     21.2 %     2.7 %p
Total cellular service
     8,845       8,493       4 %     2,272       2,218       2 %
Interconnection revenue
     859       1,027       -16 %     212       216       -2 %
L -> M
     432       615       -30 %     94       110       -15 %
M -> M
     427       412       3 %     118       106       12 %
Operating revenue
     9,704       9,520       2 %     2,485       2,434       2 %

1)   Sign-up fees

  –   The Year-over-Year (“YoY”) increase was due to increase in subscriber addition.

2)   Monthly fees

  –   The YoY increase was due to increase in the number of average subscribers.
 
  –   The Quarter-over-Quarter (“QoQ”) decrease was due to the cut in monthly fee implemented from September 1st. 2004.

3)   Call charges

  –   The YoY reduction was caused by slight decrease in MOU and the contract based discount plan.
 
  –   The QoQ increase was due to increase in MOU.

4)   VAS & others

  –   The YoY decrease was mainly due to the reduction in Caller ID fee implemented in October 2003.

5)   Wireless Internet sales

  –   The YoY revenue growth from Wireless Internet sales was driven by the higher Wireless Internet usage primarily due to the continued adoption of high-end handsets and offering of a variety of new services such as Mobile Cyworld and MMS. The increase in Wireless internet sales was also driven by increase in monthly flat fees from the introduction of unlimited data usage tariff plan.
 
  –   Accordingly, Wireless Internet sales accounted for 20.6% of cellular revenue in 2004, exceeding the guidance of 20%.

 

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6)   Interconnection revenue

  –   LM: The YoY decrease was due to the interconnection rate adjustment in July 2004 and the decrease in call traffic. Interconnection revenue decreased QoQ because some of the international interconnection rates were finalized in October 2004, resulting in retroactive adjustment of the figures from January to September in the 4th quarter.
 
  –   MM: The YoY and QoQ revenue increased due to increase in call traffic.

B. Operating expenses

                                                 
(KRW bn)   2004     2003     Change     Q4.'04     Q3.'04     Change  
Labor cost
     448       393       14 %     90       100       -10 %
Commissions paid
     2,827       2,325       22 %     659       697       -5 %
Marketing commissions
     1,532       1,217       26 %     291       366       -20 %
Initial commissions
     437       208       110 %     95       112       -15 %
Monthly commissions
     398       417       -4 %     91       94       -3 %
Retention commissions
     697       593       18 %     105       160       -34 %
Other commissions
     1,296       1,107       17 %     367       331       11 %
Advertising
     329       361       -9 %     80       69       16 %
Depreciation 1)
     1,700       1,612       5 %     495       427       16 %
Network interconnection
     859       738       16 %     245       214       15 %
M -> M
     645       525       23 %     180       162       11 %
M -> L
     214       213       1 %     66       52       27 %
Leased line
     365       302       21 %     99       94       5 %
Others 2)
     817       709       15 %     222       221       0 %
Operating expenses
     7,344       6,440       14 %     1,890       1,823       4 %

1)   Includes R&D related depreciation
 
2)   For details, please refer to non-consolidated statements of income in appendix

1)   Labor cost

  –   Increase in 2004 labor cost was due to increase in incentive bonus and wages.

2)   Commissions paid

  –   Marketing commissions: Initial commissions increased YoY due to increase in subscriber addition and higher subscriber acquisition cost under Mobile Number Portability (MNP) environment.
 
      Retention commissions increased YoY due to increased cost related to Membership program and more active handset upgrade program to lock-in good quality subscribers.
 
      As the market continued its stabilization in the 4th quarter, marketing commissions decreased QoQ due to fall in such thing as subscriber acquisition cost, membership-related expenses and handset upgrade activities.
 
  –   Other commissions: The increase was due to increase in the payment of Information Usage Fee to Content Providers as the wireless internet usage increased and the increase in the international roaming commissions.

3)   Advertising cost

  –   Advertising cost decreased YoY because SKT placed its resources more on marketing activities directly related to subscriber acquisition under MNP environment.

 

Table of Contents

  –   Advertising cost increased QoQ due to promotion of a new service called MelOn which was launched in November 2004 and increase in corporate brand advertising.

4)   Depreciation

  –   The YoY increase was due to the amortization of WCDMA frequency usage right from December, 2003.
 
  –   The QoQ increase resulted from the increase in depreciable assets.

5)   Network interconnection cost

  –   The YoY increase was due to the MM traffic increase and the interconnection rate adjustment in July 2004.
 
  –   The QoQ increase was because SKT’s portion of Universal Service Fund(USF) for 2003 was finalized in December 2004.

6)   Leased line

  –   Leased line expense increased QoQ and YoY as more lines were leased to accommodate the increase in Wireless Internet traffic, and to enhance call quality.

C. Non-operating items

                                                 
(KRW bn)   2004     2003     Change     Q4.'04     Q3.'04     Change  
Other income
     237       250       -5 %     47       49       -6 %
Interest income
     68       68       0 %     16       15       6 %
Equity in earnings of affiliates
     54       —       N/A       —       14       -100 %
Others 1)
     115       182       -37 %     31       20       53 %
Other expenses
     481       617       -22 %     160       107       49 %
Interest
     302       376       -19 %     67       79       -15 %
R&D contribution & donations
     88       90       -2 %     29       20       49 %
Others 1)
     90       151       -40 %     63       9       610 %

1)   For details, please refer to non-consolidated statements of income in appendix

1)   Equity in earnings of affiliates

  –   The YoY increase in equity method profit was due to profit improvement in subsidiaries such as SK Communications.

2)   Others in Non-Operating Income

  –   Others in Non-Operating Income decreased YoY since there were value-added tax refund from STI handset sales and miscellaneous income from the reuse of written-off equipment in 2003.

3)   Interest

  –   Interest expense decreased QoQ and YoY due to lower cost of borrowing and decrease in average balance of interest-bearing debt.

4)   Others in Non-Operating Expenses

  –   The YoY decline in non-operating expense was from the reduction in loss on equity method due to profit improvement in subsidiaries and reduction in loss on disposal of investment assets.

 

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2. Capital Expenditure

                                                 
(KRW bn)   2004     2003     Change     Q4.'04     Q3.'04     Change  
Network
     1,153       1,262       -9 %     483       336       44 %
95 A/B
     93       96       -3 %     29       16       85 %
CDMA 2000 1X
     635       641       -1 %     208       197       6 %
1X
     590       605       -2 %     202       191       5 %
EV-DO
     45       36       25 %     6       5       21 %
WCDMA
     220       204       8 %     157       57       174 %
Backbone & others
     205       321       -36 %     89       67       33 %
Non-Network
     454       435       4 %     243       80       205 %
Wireless Internet & marketing
     181       262       -31 %     77       26       190 %
General supporting
     273       172       58 %     166       53       213 %
Total CapEx
     1,607       1,696       -5 %     726       416       75 %

3. Balance Sheet

                                                 
(KRW bn)   2004. 12     2003. 12     Change     2004. 12     2004. 9     Change  
Total assets
     14,021       13,376       5 %     14,021       13,887       1 %
Current assets
     3,854       3,461       11 %     3,854       3,982       -3 %
Cash & marketable securities
     761       988       -23 %     761       635       20 %
Investment assets
     2,112       1,763       20 %     2,112       2,068       2 %
Property & equipment
     4,605       4,552       1 %     4,605       4,398       5 %
Intangible assets
     3,449       3,600       -4 %     3,449       3,438       0 %
Total liabilities
     6,894       7,434       -7 %     6,894       7,138       -3 %
Current liabilities
     2,860       4,232       -32 %     2,860       3,288       -13 %
Short-term borrowings
     400       729       -45 %     400       490       -18 %
Current portion of long-term debt
     498       1,364       -63 %     498       998       -50 %
Long-term liabilities
     4,034       3,202       26 %     4,034       3,849       5 %
Bond payable & long-term borrowings
     2,892       2,258       28 %     2,892       2,728       6 %
Total shareholders’ equity
     7,127       5,942       20 %     7,127       6,749       6 %
Debt/Equity ratio 1)
     53.2 %     73.2 %     -20.1 %p     53.2 %     62.5 %     -9.3 %p

1)   Debt/Equity Ratio = Interest-bearing debt / Shareholders’ equity

 

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*   Interest-bearing debt = Short-term borrowings + Current portion of long-term debt + Corporate bonds

1)   Cash & marketable securities

  –   Cash & Marketable Securities balance decreased mainly due to the debt repayment during the period.

2)   Investment assets

  –   The YoY increase was due to the increase in equity method gain and valuation gain on available-for-sale securities.

3)   Total liabilities

  –   As of December 2004, debt to equity ratio decreased to 53.2% from 73.2% in 2003 due to the reduction of debt.

III. Operating Result

                                                 
    2004     2003     Change     Q4.'04     Q3.'04     Change  
Subscribers (‘000)
     18,783       18,313       3 %     18,783       18,603       1 %
Net adds
     470       1,094       -57 %     180       8       2239 %
Activations
     4,407       3,688       19 %     1,018       902       13 %
Deactivations
     3,937       2,595       52 %     837       895       -6 %
Monthly churn rate
     1.7 %     1.2 %     0.6 %p     1.5 %     1.6 %     -0.1 %p
Average subscribers(‘000)
     18,572       17,810       4 %     18,682       18,721       0 %
ARPU (KRW)
     43,542       44,546       -2 %     44,336       43,343       2 %
Sign-up fee
     890       826       8 %     827       748       11 %
Monthly fee & call charge
     29,023       30,748       -6 %     28,388       28,747       -1 %
VAS & others
     1,594       1,988       -20 %     1,620       1,625       0 %
Wireless Internet
     8,182       6,177       32 %     9,710       8,375       16 %
Interconnection
     3,853       4,807       -20 %     3,791       3,849       -2 %
MOU (Minutes)
                                                
Outgoing
     193 1)     197       -2 %     195       188       4 %
Incoming
     112 1)     113       -1 %     116       114       2 %
Subscribers by handset feature (‘000)
                                                
1x (Including EV-DO)
     17,048       14,424       18 %     17,048       16,672       2 %
EV-DO (Including June)
     6,484       3,562       82 %     6,484       5,962       9 %
June
     3,622       1,678       116 %     3,622       3,160       15 %
Color
     14,843       10,570       40 %     14,843       14,193       5 %

 

Table of Contents

                                                 
    2004     2003     Change     Q4.'04     Q3.'04     Change  
Data ARPU by handset (KRW) 2)
                                                
2G
     1,650       1,362       21 %     1,975       1,750       13 %
1X(Including EV-DO)
     8,243       7,293       13 %     9,184       8,340       10 %
Color
     9,614       9,911       -3 %     10,314       9,571       8 %

1)   MOU for November and December of 2004 is an estimate.
 
2)   Excludes others in wireless internet sales such as financial enabler, Solution/Platform sales, etc.

IV. Appendix (Non-Consolidated Statements of Income)

                                 
(KRW mn)   2004     2003     Q4.'04     Q3.'04  
Operating revenue
     9,703,681       9,520,244       2,484,849       2,434,269  
Operating expenses
     7,344,100       6,439,585       1,890,469       1,822,931  
Labor cost 1)
     448,099       392,701       89,600       99,758  
Commissions paid
     2,827,159       2,324,586       658,594       696,906  
Advertising
     328,552       361,114       80,266       69,392  
Depreciation 2)
     1,699,531       1,612,132       495,434       427,045  
Network interconnection
     858,754       738,236       245,278       214,005  
Leased line
     365,444       302,288       98,847       94,406  
Rent
     167,671       140,213       44,620       42,784  
Frequency usage fees
     143,047       129,525       37,836       37,872  
Bad debt
     22,544       19,536       3,227       19,317  
Others
     483,298       419,253       136,768       121,447  
Operating income
     2,359,581       3,080,660       594,381       611,338  
Other income
     237,129       250,448       46,575       49,398  
Interest income
     68,319       68,259       15,729       14,906  
Equity in earnings of affiliates
     53,825       —       —       14,386  
Dividend income
     23,843       25,923       1,139       3,912  
Foreign exchange & translation gains
     10,897       2,064       1,634       187  
Others
     80,245       154,202       28,073       16,007  
Other expenses
     480,932       616,914       159,600       107,267  
Interest
     302,491       375,609       67,014       78,742  
R&D contribution & donations
     88,345       90,200       29,277       19,608  
Equity in losses of affiliates
     —       30,537       4,414       —  
Foreign exchange & translation losses
     6,248       1,065       4,401       324  

 

Table of Contents

                                 
(KRW mn)   2004     2003     Q4.'04     Q3.'04  
Loss on impairment of investment securities
     32,074       20,343       19,293       1,000  
Loss on disposal of investment assets, & property/equipment
     19,154       57,991       9,408       869  
Others
     32,620       41,169       25,792       6,725  
Ordinary income
     2,115,778       2,714,194       481,355       553,469  
Income before income taxes
     2,115,778       2,714,194       481,355       553,469  
Income taxes
     620,926       771,444       133,283       157,934  
Net income
     1,494,852       1,942,750       348,072       395,536  

1)   Includes salary, severance pay and other benefits
 
2)   Includes R&D related depreciation

IV. Appendix (Non-Consolidated Balance Sheets)

                                 
(KRW mn)   2004     2003     2004.12     2004. 9  
Total assets
     14,020,705       13,375,959       14,020,705       13,886,526  
Current assets
     3,854,345       3,460,706       3,854,345       3,982,333  
Cash and marketable securities 1)
     761,055       987,646       761,055       635,140  
Accounts receivable — trade
     1,562,774       1,438,836       1,562,774       1,359,706  
Accounts receivable — other
     1,365,226       811,496       1,365,226       1,785,905  
Short-term loans
     55,613       51,102       55,613       55,694  
Inventories
     10,961       8,024       10,961       13,779  
Other
     98,716       163,602       98,716       132,108  
Investment assets
     2,112,488       1,763,359       2,112,488       2,067,979  
Investment securities 2)
     1,749,783       1,418,734       1,749,783       1,711,738  
Long-term loans
     28,284       41,591       28,284       26,169  
Guarantee deposits
     242,387       246,004       242,387       245,078  
Other
     92,033       57,030       92,033       84,994  
Property & equipment
     4,605,253       4,551,626       4,605,253       4,397,871  
Land
     463,656       446,574       463,656       446,095  
Building & fixture
     1,163,070       840,237       1,163,070       808,415  
Machinery
     2,585,118       2,625,307       2,585,118       2,266,293  
Vehicles & others
     255,407       329,945       255,407       364,769  

 

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(KRW mn)   2004     2003     2004.12     2004. 9  
Construction in progress
     138,002       309,564       138,002       512,299  
Intangible assets
     3,448,619       3,600,268       3,448,619       3,438,343  
Total liabilities
     6,893,613       7,434,121       6,893,613       7,137,759  
Current liabilities
     2,859,711       4,231,974       2,859,711       3,288,332  
Short-term borrowings
     400,000       728,669       400,000       490,000  
Accounts payable
     1,070,588       1,117,835       1,070,588       1,011,729  
Income taxes payable
     267,797       399,852       267,797       120,097  
Accrued expenses
     378,303       401,245       378,303       402,091  
Current portion of long-term debt
     498,278       1,364,264       498,278       998,347  
Other
     244,745       220,109       244,745       266,069  
Long-term liabilities
     4,033,902       3,202,147       4,033,902       3,849,428  
Bond payable & long-term borrowings
     2,891,843       2,258,276       2,891,843       2,727,513  
Facility deposits
     31,440       44,197       31,440       33,316  
Accrued severance indemnities
     75,409       63,663       75,409       96,390  
Others
     1,035,210       836,011       1,035,210       992,209  
Total shareholders’ equity
     7,127,091       5,941,838       7,127,091       6,748,767  
Capital stock
     44,639       44,639       44,639       44,639  
Capital surplus
     2,983,166       2,915,964       2,983,166       2,983,166  
Retained earnings
     6,156,708       5,140,349       6,156,708       5,808,636  
Capital adjustments
     (2,057,422 )     (2,159,114 )     (2,057,422 )     (2,087,675 )
Treasury stock
     (2,047,105 )     (2,047,103 )     (2,047,105 )     (2,047,105 )
Unrealized gain(loss) on valuation of investment securities
     (15,150 )     (115,752 )     (15,150 )     (45,135 )
Stock options
     4,833       3,741       4,833       4,565  

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

 

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V. IR Contacts

             
IR Office   Title   Telephone   Email address
Tae-Jin Park
  Head of IR Team   02)6100-1631   tjpark@sktelecom.com
           
Tae-Geon Park
  Manager   02)6100-1632   parktg@sktelecom.com
           
Uk Jang
  Manager   02)6100-1633   ujang@sktelecom.com
           
JS Oh
  Assistant Manager   02)6100-1638   jsoh@sktelecom.com
           
Hannah Kim
  Assistant Manager   02)6100-1640   hannah@sktelecom.com
           

 

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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: February 4, 2005