SK Telecom's Earnings Down 12% Due to Cyberattack: Fair Value Estimate Reduced to $25

SK Telecom's Q2 earnings were negatively impacted by a cyberattack, leading to a 12% decrease in Morningstar's fair value estimate to $25. The South Korean telecom operator has 32 million mobile customers, 7.2 million broadband customers, and 9.6 million pay TV customers. The firm also owns stakes in security and semiconductor memory production, as well as e-commerce and internet platform businesses.

SK Telecom Co., South Korea's leading wireless service provider, reported a significant drop in its second-quarter net profit due to the fallout from a massive data breach affecting its entire 25 million user base. The company's net profit for the three months ended in June fell to 83.2 billion won (US$60 million) from 350.2 billion won in the same period last year [1]. The earnings fell short of market expectations, with the average estimate of net profit by analysts standing at 187.3 billion won [1].

The operating income for the same period fell 37.1% on-year to 338.3 billion won, and sales decreased 1.9% to 4.33 trillion won. SK Telecom attributed the sharp decline in net profit to one-off costs, including customer universal subscriber identity module (USIM) card replacements and retail stores' loss compensation [1].

Despite the sluggish overall performance, SK Telecom's artificial intelligence (AI) business delivered strong growth. Sales of the AI data center segment rose 13.3% on-year to 108.7 billion won, while the AI transformation (AIX) division posted a 15.3% increase to earn 46.8 billion won in sales [1]. The company expects its AI data center business to generate over 1 trillion won in annual revenue by 2030 [1].

SK Telecom's performance stands in stark contrast to its competitors KT Corp. and LG Uplus Corp., which posted strong financial results for Q2 2025. KT reported a record-breaking operating profit of 1.15 trillion won, marking a 105.4% increase from the previous year, while LG U+ saw its operating profit rise 19.9% to 304.5 billion won [2]. Both companies benefited from expanding 5G subscriber numbers and mobile number portability, with LG U+ also reporting growth in its internet data center (IDC) business [2].

Morningstar's fair value estimate for SK Telecom dropped by 12% to $25 following the Q2 earnings report. The company has 32 million mobile customers, 7.2 million broadband customers, and 9.6 million pay TV customers. SK Telecom also owns stakes in security and semiconductor memory production, as well as e-commerce and internet platform businesses [3].

SK Telecom emphasized its commitment to restoring customer trust through stronger data protection and security measures. The company has launched an 'Accountability and Commitment Program' to enhance customer protection and information security, following a recent cybersecurity incident. This initiative includes significant investments in security systems and customer benefits to rebuild trust [3].

References:
[1] https://en.yna.co.kr/view/AEN20250806002051320
[2] http://koreabizwire.com/telecom-giants-q2-performance-divided-sk-telecom-struggles-kt-and-lg-u-see-gains/329067
[3] https://www.theglobeandmail.com/investing/markets/stocks/SKM/pressreleases/33949147/sk-telecom-reports-q2-2025-earnings-and-ai-growth/