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 OCTOBER 2005

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 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-    .)

 

 

October 27, 2005

Results for the year
ended September 30, 2005

* The information contained herein is based on Korean GAAP.

Seoul, Korea, October 27, 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 September 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)		Q3. ’05				Q3. ’04				Change				Q3. ’05				Q2. ’05				Change
Operating revenue			2,595				2,434				7	%			2,595				2,527				3	%
Operating expenses			1,925				1,823				6	%			1,925				1,814				6	%
Operating income			671				611				10	%			671				713				-6	%
Operating margin			25.9	%			25.1	%			0.7	%p			25.9	%			28.2	%			-2.4	%p
Other income			232				49				371	%			232				44				426	%
Other expenses			114				107				6	%			114				107				6	%
Ordinary income			790				553				43	%			790				651				21	%
Net income			588				396				49	%			588				467				26	%
Net margin			22.7	%			16.2	%			6.4	%p			22.7	%			18.5	%			4.2	%p
EBITDA 1)			1,080				1,038				4	%			1,080				1,103				-2	%
EBITDA margin			41.6	%			42.7	%			-1.0	%p			41.6	%			43.7	%			-2.0	%p

• Other Main Items

(KRW bn)		Q3. ’05				Q3. ’04				Change				Q3. ’05				Q2. ’05				Change
Wireless Internet sales			653				470				39	%			653				597				9	%
% of Cellular revenue			27.6	%			21.2	%			6.4	%p			27.6	%			26.0	%			1.6	%p
Marketing expenses			453				436				4	%			453				442				2	%
- Marketing commissions			386				366				5	%			386				376				3	%
- Advertising			67				69				-3	%			67				66				2	%
% of Revenue			17.4	%			17.9	%			-0.5	%p			17.4	%			17.5	%			0.0	%p
Capital expenditure			425				416				2	%			425				278				53	%
% of Revenue			16.4	%			17.1	%			-0.7	%p			16.4	%			11.0	%			5.4	%p
Interest-bearing debt			3,308				4,216				-22	%			3,308				3,596				-8	%
Debt/Equity ratio			42.0	%			62.5	%			-20.5	%p			42.0	%			49.6	%			-7.7	%p

II. Financial Results

1. Income Statement

A. Operating revenue

(KRW bn)		Q3. ’05				Q3. ’04				Change				Q3. ’05				Q2. ’05				Change
Sign-up fees			58				42				39	%			58				59				-1	%
Monthly fees			651				744				-13	%			651				650				0	%
Call charges			897				870				3	%			897				894				0	%
VAS & others			106				91				16	%			106				98				8	%
Wireless Internet sales			653				470				39	%			653				597				9	%
% of Cellular service			27.6	%			21.2	%			6.4	%p			27.6	%			26.0	%			1.6	%p
Total cellular service			2,365				2,218				7	%			2,365				2,299				3	%
Interconnection revenue			230				216				6	%			230				228				1	%
L -> M			103				110				-7	%			103				102				0	%
M -> M			127				106				20	%			127				126				1	%
Operating revenue			2,595				2,434				7	%			2,595				2,527				3	%

1)		Sign-up fees
		– The YoY increase was due to increase 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 and increase in phone mail discount from increased usage, as phone mail discount is reflected in monthly fees. (Phone mail discount ‘04. 3Q KRW 64.3 bn --> ‘05. 3Q KRW 187.1 bn)
3)		Call charges
		– The YoY increase was due to increase in the average number of subscribers.
4)		VAS & others
		– The YoY and QoQ increase was due to increase in the number of VAS subscribers and increased usage of international roaming.
5)		Wireless Internet sales
		– The YoY and QoQ increase was due to the success of such services like MelOn, Mobile Cyworld and others and the increased usage of data flat rate plans.
6)		Interconnection revenue
		– The YoY increased due to the increased call traffic despite the the decrease in interconnection rate adjustment.

B. Operating expenses

(KRW bn)		Q3. ’05				Q3. ’04				Change				Q3. ’05				Q2. ’05				Change
Labor cost			112				100				12	%			112				74				51	%
Commissions paid			747				697				7	%			747				716				4	%
Marketing commissions			386				366				5	%			386				376				3	%
Initial commissions			149				112				34	%			149				136				10	%
Monthly commissions			94				94				0	%			94				89				5	%
Retention commissions			142				160				-11	%			142				151				-6	%
Other commissions			362				331				9	%			362				340				6	%
Advertising			67				69				-3	%			67				66				2	%
Depreciation1)			409				427				-4	%			409				390				5	%
Network interconnection			239				214				12	%			239				240				-1	%
M -> M			189				162				17	%			189				190				0	%
M -> L			49				52				-4	%			49				50				-2	%
Leased line			98				94				4	%			98				95				3	%
Others2)			252				221				14	%			252				232				9	%
Operating expenses			1,925				1,823				6	%			1,925				1,814				6	%

1)		Labor cost
		– The YoY increase was due to the retroactive payment of wage increase.
		– The QoQ increase was due to Chusok incentive bonus and retroactive payment of wage increase in 3rd quarter.
2)		Commissions paid
		– The YoY increase was due to relative increase in the number of new subscribers in 3Q as there were subscriber acquisition ban in 3Q of ’04.
		– The QoQ increase was due to increased initial commissions because of the increased number of new subscribers.
3)		Advertising cost
		– The QoQ increase was due to increase in advertising for new promotions.
4)		Network interconnection cost
		– The YoY increase was due to the increase in MM calls.
		– The QoQ decrease was due to seasonal effects but the amount of decrease had been mitigated by the increased SMS traffic resulting in only 1% drop overall.
5)		Leased line
		– Leased line expense increased QoQ and YoY due to increased number of subscribers and data traffic.

C. Non-operating items

(KRW bn)		Q3. ’05				Q3. ’04				Change				Q3. ’05				Q2. ’05				Change
Other income			232				49				371	%			232				44				426	%
Interest income			13				15				-16	%			13				12				5	%
Equity in earnings of affiliates			22				14				55	%			22				12				90	%
Others 1)			198				20				883	%			198				20				864	%
Other expenses			114				107				6	%			114				107				6	%
Interest			60				79				-24	%			60				66				-9	%
Equity in losses of affiliates			20				—				N/A				20				18				16	%
R&D contribution & donations			30				20				55	%			30				19				61	%
Others 1)			3				9				-62	%			3				5				-29	%

1)		Equity in earnings of affiliates
		– The QoQ increase was due to the increase in earnings of SK Communications and SK Telink.
2)		Others in Other Income
		– The QoQ and YoY increase were mainly due to the gain from the sale of SKY Teletech (KRW 175.5 bn).
3)		Equity in losses of affiliates
		– Losses of affiliates were due to the net losses from SK Earthlink and TU Media.

2. Capital Expenditure

(KRW bn)		Q3. ’05				Q3. ’04				Change				Q3. ’05				Q2. ’05				Change
Network			377				336				12	%			377				230				64	%
2G / 1X / EV-DO			119				212				-44	%			119				101				19	%
WCDMA			219				57				281	%			219				108				103	%
Backbone & others			38				67				-43	%			38				21				79	%
Non-Network			48				80				-40	%			48				48				1	%
Wireless Internet & marketing			39				26				45	%			39				35				11	%
General supporting			9				53				-82	%			9				13				-27	%
Total CapEx			425				416				2	%			425				278				53	%

3. Balance Sheet

(KRW bn)		2005. 9				2004. 9				Change				2005. 9				2005. 6				Change
Total assets			14,114				13,887				2	%			14,114				13,758				3	%
Current assets			4,192				3,982				5	%			4,192				3,983				5	%
Cash & marketable securities			940				635				48	%			940				810				16	%
Investment assets			2,142				2,068				4	%			2,142				2,012				6	%
Property & equipment			4,409				4,398				0	%			4,409				4,333				2	%
Intangible assets			3,370				3,438				-2	%			3,370				3,430				-2	%
Total liabilities			6,227				7,138				-13	%			6,227				6,509				-4	%
Current liabilities			2,266				3,288				-31	%			2,266				2,246				1	%
Short-term borrowings			200				490				-59	%			200				500				-60	%
Current portion of long-term debt			348				998				-65	%			348				—				N/A
Long-term liabilities			3,962				3,849				3	%			3,962				4,263				-7	%
Bond payable & long-term borrowings			2,761				2,728				1	%			2,761				3,096				-11	%
Total shareholders’ equity			7,886				6,749				17	%			7,886				7,249				9	%
Debt/Equity ratio 1)			42.0	%			62.5	%			-20.5	%p			42.0	%			49.6	%			-7.7	%p

1)		Debt/Equity Ratio = Interest-bearing debt / Shareholders’ equity
		* Interest-bearing debt = Short-term borrowings + Current portion of long-term debt + Corporate bonds
1)		Cash & marketable securities
		– QoQ increase was due to inflow of proceeds from the sale of SKY Teletech.
2)		Investment assets
		– The QoQ increase was due to the increased valuation of investment securities such as POSCO shares.
3)		Total liabilities
		– The QoQ decrease in debt to equity ratio was due to decrease in borrowings as a result of the repayment of CP and others.
4)		Total Shareholder’s equity
		– Increase in total shareholders’ equity was due to increase in the retained earnings and valuation of investment securities such as POSCO shares.

III. Operating Result

		Q3. ’05				Q3. ’04				Change				Q3. ’05				Q2. ’05				Change
Subscribers (’000)			19,342				18,603				4	%			19,342				19,196				1	%
Net adds			146				8				1791	%			146				189				-23	%
Activations			1,278				902				42	%			1,278				1,261				1	%
Deactivations			1,132				895				27	%			1,132				1,072				6	%
Monthly churn rate			2.0	%			1.6	%			0.3	%p			2.0	%			1.9	%			0.1	%p
Average subscribers (’000)			19,260				18,721				3	%			19,260				19,099				1	%
ARPU (KRW)			44,921				43,343				4	%			44,921				44,105				2	%
Sign-up fee			1,009				748				35	%			1,009				1,025				-2	%
Monthly fee & call charge			26,797				28,747				-7	%			26,797				26,962				-1	%
VAS & others			1,833				1,625				13	%			1,833				1,719				7	%
Wireless Internet			11,301				8,375				35	%			11,301				10,419				8	%
Interconnection			3,981				3,849				3	%			3,981				3,981				0	%
MOU (Minutes)
Outgoing			1971				190				4	%			1971				200				-2	%
Incoming			1161				114				2	%			1161				113				3	%
Subscribers by handset feature (’000)
1x (Including EV-DO)			18,256				16,672				10	%			18,256				17,940				2	%
EV-DO (Including June)			7,760				5,962				30	%			7,760				7,416				5	%
June			5,759				3,160				82	%			5,759				4,801				20	%
Color			16,830				14,193				19	%			16,830				16,279				3	%
Data ARPU by handset (KRW) 2)
2G			2,615				1,750				49	%			2,615				2,242				17	%
1X (Including EV-DO)			11,349				8,340				36	%			11,349				10,622				7	%
Color			12,206				9,571				28	%			12,206				11,594				5	%

IV. Appendix (Non-Consolidated Statements of Income)

(KRW mn)		Q3. '05				Q3. '04				Change				Q3. '05				Q2. '05				Change
Operating revenue			2,595,485				2,434,269				161,217				2,595,485				2,527,150				68,335
Operating expenses			1,924,552				1,822,931				101,622				1,924,552				1,813,761				110,792
Labor cost1)			112,107				99,758				12,349				112,107				74,335				37,772
Commissions paid			747,158				696,906				50,252				747,158				715,926				31,232
Advertising			67,234				69,392				(2,158	)			67,234				66,033				1,201
Depreciation 2)			409,068				427,045				(17,977	)			409,068				389,946				19,122
Network interconnection			238,966				214,005				24,961				238,966				240,446				(1,481	)
Leased line			98,252				94,406				3,846				98,252				95,190				3,062
Rent			43,814				42,784				1,030				43,814				43,347				467
Frequency usage fees			38,555				37,872				683				38,555				38,814				(259	)
Bad debt			31,407				19,317				12,090				31,407				20,100				11,306
Others			137,991				121,447				16,544				137,991				129,623				8,368
Operating income			670,933				611,338				59,595				670,933				713,390				(42,457	)
Other income			232,441				49,398				183,043				232,441				44,185				188,256
Interest income			12,521				14,906				(2,386	)			12,521				11,969				552
Equity in earnings of affiliates			22,318				14,386				7,932				22,318				11,720				10,597
Dividend income			5,076				3,912				1,164				5,076				227				4,849
Foreign exchange & translation gains			864				187				677				864				246				618
Others			191,663				16,007				175,656				191,663				20,022				171,641
Other expenses			113,783				107,267				6,516				113,783				106,879				6,904
Interest			59,588				78,742				(19,153	)			59,588				65,623				(6,035	)
R&D contribution & donations			30,489				19,608				10,881				30,489				18,949				11,540
Equity in losses of affiliates			20,326				—				20,326				20,326				17,554				2,773
Foreign exchange & Translation losses			346				324				22				346				161				186
Loss on impairment Of investment securities			—				1,000				(1,000	)			—				—				—
Loss on disposal of Investment assets, & property/equipment			499				869				(369	)			499				1,609				(1,110	)
Others			2,534				6,725				(4,191	)			2,534				2,984				(450	)
Ordinary income			789,591				553,469				236,122				789,591				650,695				138,896
Income before income taxes			789,591				553,469				236,122				789,591				650,695				138,896
Income taxes			201,714				157,934				43,780				201,714				183,585				18,129
Net income			587,878				395,536				192,342				587,878				467,110				120,768

IV. Appendix (Non-Consolidated Balance Sheets)

(KRW mn)		2005. 9				2004. 9				Change				2005. 9				2005. 6				Change
Total assets			14,113,637				13,886,526				227,111				14,113,637				13,758,476				355,162
Current assets			4,192,212				3,982,333				209,878				4,192,212				3,983,128				209,084
Cash and marketable securities1)			940,245				635,140				305,105				940,245				810,146				130,099
Accounts receivable — trade			1,572,027				1,359,706				212,321				1,572,027				1,580,501				(8,474	)
Accounts receivable — other			1,404,327				1,785,905				(381,578	)			1,404,327				1,325,801				78,526
Short-term loans			66,527				55,694				10,833				66,527				74,790				(8,263	)
Inventories			13,991				13,779				212				13,991				11,479				2,512
Other			195,095				132,108				62,987				195,095				180,411				14,684
Investment assets			2,142,437				2,067,979				74,458				2,142,437				2,012,317				130,120
Investment securities 2)			1,917,573				1,711,738				205,836				1,917,573				1,766,552				151,021
Long-term loans			16,513				26,169				(9,656	)			16,513				19,139				(2,626	)
Guarantee deposits			127,329				245,078				(117,749	)			127,329				131,293				(3,964	)
Other			81,022				84,994				(3,972	)			81,022				95,333				(14,311	)
Property & equipment			4,409,145				4,397,871				11,274				4,409,145				4,333,405				75,740
Land			465,375				446,095				19,279				465,375				465,022				352
Building & fixture			1,147,266				808,415				338,851				1,147,266				1,157,493				(10,227	)
Machinery			2,128,014				2,266,293				(138,279	)			2,128,014				2,239,508				(111,494	)
Vehicles & others			425,522				364,769				60,753				425,522				278,735				146,787
Construction in progress			242,968				512,299				(269,331	)			242,968				192,647				50,321
Intangible assets			3,369,844				3,438,343				(68,499	)			3,369,844				3,429,626				(59,781	)
Total liabilities			6,227,499				7,137,759				(910,261	)			6,227,499				6,509,265				(281,766	)
Current liabilities			2,265,700				3,288,332				(1,022,631	)			2,265,700				2,246,208				19,493
Short-term borrowings			200,000				490,000				(290,000	)			200,000				500,000				(300,000	)
Accounts payable			690,430				1,011,729				(321,299	)			690,430				654,358				36,071
Income taxes payable			251,117				120,097				131,020				251,117				339,767				(88,650	)
Accrued expenses			492,992				402,091				90,901				492,992				434,934				58,058
Current portion of long-term debt			347,609				998,347				(650,738	)			347,609				—				347,609
Other			283,553				266,069				17,484				283,553				317,149				(33,596	)
Long-term liabilities			3,961,798				3,849,428				112,371				3,961,798				4,263,057				(301,258	)
Bond payable & long-term borrowings			2,760,639				2,727,513				33,126				2,760,639				3,095,743				(335,104	)
Facility deposits			24,602				33,316				(8,714	)			24,602				25,701				(1,100	)

(KRW mn)		2005. 9				2004. 9				Change				2005. 9				2005. 6				Change
Accrued severance indemnities			97,727				96,390				1,337				97,727				87,995				9,732
Others			1,078,831				992,209				86,622				1,078,831				1,053,618				25,213
Total shareholders’ equity			7,886,139				6,748,767				1,137,372				7,886,139				7,249,211				636,928
Capital stock			44,639				44,639				—				44,639				44,639				—
Capital surplus			2,966,198				2,983,166				(16,969	)			2,966,198				2,966,198				—
Retained earnings			6,821,886				5,808,636				1,013,250				6,821,886				6,307,623				514,263
Capital adjustments			(1,946,584	)			(2,087,675	)			141,090				(1,946,584	)			(2,069,249	)			122,664
Treasury stock			(2,047,105	)			(2,047,105	)			—				(2,047,105	)			(2,047,105	)			—
Unrealized gain(loss) On valuation of investment securities			97,040				(45,135	)			142,175				97,040				(5,505	)			102,545
Stock options			3,480				4,565				(1,085	)			3,480				3,480				—

V. IR Contacts

IR Office		Title		Telephone		Email
Tae-Jin Park		Head of IR Team		02)6100-1631		tjpark@sktelecom.com
Tae-Geon Park		Manager		02)6100-1632		parktg@sktelecom.com
Hee Jun Chung		Manager		02)6100-1634		junny73@sktelecom.com
Hosook Hwang		Assistant Manager		02)6100-1636		hhwang@sktelecom.com
Paul Kim		Assistant Manager		02)6100-1630		paulkim@sktelecom.com

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.

Date: October 31, 2005