SEC Form 6-K filed by SK Telecom Co. Ltd.

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

FOR THE MONTH OF June 2024

COMMISSION FILE NUMBER: 333-04906

 

 

SK Telecom Co., Ltd.

(Translation of registrant’s name into English)

 

 

65, Eulji-ro, Jung-gu

Seoul 04539, Korea

(Address of principal executive office)

 

 

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 ☒     Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 

QUARTERLY BUSINESS REPORT

(From January 1, 2024 to March 31, 2024)

THIS IS A SUMMARY OF THE QUARTERLY BUSINESS REPORT ORIGINALLY PREPARED IN KOREAN WHICH IS IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SERVICES COMMISSION.

IN THE TRANSLATION PROCESS, SOME PARTS OF THE REPORT WERE REFORMATTED, REARRANGED OR SUMMARIZED FOR THE CONVENIENCE OF READERS.

ALL REFERENCES TO THE “COMPANY” SHALL MEAN SK TELECOM CO., LTD. AND, UNLESS THE CONTEXT OTHERWISE REQUIRES, ITS CONSOLIDATED SUBSIDIARIES. REFERENCES TO “SK TELECOM” SHALL MEAN SK TELECOM CO., LTD., BUT SHALL NOT INCLUDE ITS CONSOLIDATED SUBSIDIARIES.

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A CONSOLIDATED BASIS IN ACCORDANCE WITH THE INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTED FOR USE IN KOREA (“K-IFRS”) WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. THE COMPANY HAS MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.

I.	COMPANY OVERVIEW

Omitted in quarterly reports in accordance with applicable Korean disclosure rules. For more information, please refer to the Company’s annual business report for the year ended December 31, 2023.

 

II.

BUSINESS

1. Business Overview

Each company in the consolidated entity is a separate legal entity providing independent services and products. The Company’s business is primarily separated into (1) the wireless business consisting of cellular voice, wireless data and wireless Internet services, (2) the fixed-line business consisting of fixed-line telephone, high-speed Internet, data and network lease services, among others and (3) other businesses consisting of commercial retail data broadcasting channel business, among others.

Set forth below is a summary description of the business of each of the Company’s material consolidated subsidiaries.

 

Classification		Company name		Description of business
Wireless		SK Telecom Co., Ltd.		Wireless voice and data telecommunications services via digital wireless networks
		PS&Marketing Co., Ltd. (“PS&Marketing”)		Sale of fixed-line and wireless telecommunications products through wholesale, retail and online distribution channels
		SK O&S Co., Ltd. (“SK O&S”)		Maintenance of switching stations
		Service Ace Co., Ltd. (“Service Ace”)		Management and operation of customer centers
Fixed-line		SK Broadband Co., Ltd. (“SK Broadband”)		High-speed Internet, TV, telephone, commercial data and other fixed-line services and management of the transmission system for online digital contents   Various media-related services, such as channel management services including video-on-demand services
		Home & Service Co., Ltd. (“Home&Service”)		System maintenance of high-speed Internet, Internet protocol TV (“IPTV”) and fixed-line services
		SK Telink Co., Ltd. (“SK Telink”),		International wireless direct-dial “00700” services and MVNO business
Other business		SK stoa Co., Ltd. (“SK Stoa”)		Operation of commercial retail data broadcasting channel services
		Atlas Investment		Investments
		SK Telecom Innovation Fund, L.P.		Investments
		SK m&service Co., Ltd. (“SK M&Service”)		Database and online information services
		SAPEON Inc. (“Sapeon”)		Manufacture of non-memory and other electronic integrated circuits
		SAPEON Korea Inc. (“SAPEON Korea”)		Manufacture of non-memory and other electronic integrated circuits

[Wireless Business]

 

A.

Overview

Wireless telecommunications companies provide services based on competitive strengths in handheld devices, affordable pricing, network coverage and an extensive contents library. The Company continues to maintain its reputation as the unparalleled premium network operator in the 3G, 4G and 5G markets on the basis of its technological leadership and network management technology. With the world’s first commercialization of 5G technology in 2019, the Company continues to maintain its position as the top network operator in the 5G era and strives to provide differentiated services to its customers.

 

2

In order to strengthen its sales channels, the Company has been offering a variety of fixed-line and wireless telecommunications convergence products through its subsidiary, PS&Marketing. PS&Marketing provides differentiated service to customers through the establishment of new sales channels and product development. Through its subsidiary Service Ace, the Company operates customer service centers and provides telemarketing services. Additionally, SK O&S, the Company’s subsidiary responsible for the operation of the Company’s networks, provides customers with quality network services and provides the Company with technological know-how in network operations.

The Company has been maintaining solid profitability based on the stable sales generated from its 5G subscribers, together with efficient investments in, and operation of, its wireless networks and stabilization of market competition. The Company’s 5G wireless services, which recorded 15.93 million subscribers as of March 31, 2024, accounted for 70% of the Company’s total number of subscribers. The Company continually seeks growth in the number of its 5G wireless subscribers while actively implementing artificial intelligence (“AI”) technology into its fixed-line and wireless businesses, thereby continuing efforts to optimize efficiencies in operational and capital expenditures.

In addition, the Company has been promoting growth in its enterprise business by developing various AI-related business items, including AI contact centers, vision AI and big data, while continuing efforts to increase demand for the Company’s Internet of Things (“IoT”) lines. For the three months ended March 31, 2024, the Company’s enterprise business recorded an increase in revenue of approximately 10% compared to the three months ended March 31, 2023. In particular, based mainly on recurring revenue, the Company’s cloud business recorded an increase in revenue of approximately 40% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, thereby driving the revenue growth of the Company’s overall enterprise business.

“A. (Adot),” the Company’s Korean language GPT-3 based service, has resonated with the market by introducing call recording and summarization features, and it continues to innovate customers’ communication experience, including by introducing real-time interpretation service during calls. In April 2024, the Company expanded A.’s call recording and summarization features as well as real-time interpretation service during calls, which have been highly popular among iPhone users, to devices run on the Google Android operating system.

 

B.	Industry Characteristics

The telecommunications services market can be categorized into telecommunications services (such as fixed-line, wireless and leased line services, as well as sales intermediary services relating thereto and value-added services) and broadcasting and telecommunications convergence services (including IPTV and integrated fixed-line and mobile telecommunications services). Pursuant to the Telecommunications Business Act, the telecommunications services market can be further classified into basic telecommunications (fixed-line and wireless telecommunications), special category telecommunications (resale of telecommunications equipment, facilities and services) and value-added telecommunications (Internet connection and management, media contents and others).

The size of the domestic telecommunications services market is determined based on various factors specific to Korea, including the size of the population that uses telecommunications services and telecommunications expenditures per capita. While it is possible for Korean telecommunications service providers to provide services abroad through acquisitions or otherwise, foreign telecommunications services markets have their own characteristics depending, among others, on the regulatory environment and demand for telecommunications services.

 

C.	Growth Potential

The Korean mobile communications market is considered to have reached its maturation stage with more than a 100% penetration rate. However, the Korean mobile communications market continues to improve in the quality of services with the help of advances in network-related technology and the development of highly advanced smartphones which enable the provision of new ICT services for advanced multimedia contents, mobile commerce, mobility and other related services. In addition, the ultra-low latency and high capacity characteristics of 5G networks as well as the advancement of AI are expected to accelerate the introduction of new services and the growth of IoT-based B2B businesses.

 

(Unit: in 1,000 persons)
Classification				As of March 31, 2024				As of December 31,
								2023				2022
Number of subscribers		SK Telecom			31,662				31,276				30,452
		Others (KT, LG U+)			36,080				35,643				32,676
		MVNO			16,569				15,851				12,829
		Total			84,311				82,770				75,957

 

*	Source: Wireless telecommunications service data from the MSIT as of March 31, 2024.

 

3

D.	Domestic and Overseas Market Conditions

The Korean mobile communications market includes the entire population of Korea with mobile communications service needs, and almost every Korean is considered a potential user. Sales revenue related to data services has been growing due to the increasing popularity of smartphones and high-speed wireless networks. There is also a growing importance of the B2B segment, which creates added value by selling and developing various solutions. The telecommunications industry is a regulated industry requiring license and approval from the MSIT.

In the wireless business, industry players compete on the basis of the following three main competitive elements:

(i) brand competitiveness, which refers to the overall sense of recognition and loyalty experienced by customers with respect to services and values provided by a company, including the images created by a company’s comprehensive activities and communications on top of the actual services rendered;

(ii) product and service competitiveness, which refers to the fundamental criteria for wireless telecommunications services, including voice quality, service coverage, broad ranges of rate plans, diversified mobile Internet services, price and quality of devices, and customer service quality, as well as the ability to develop new services that meet customer needs in a market environment defined by convergence; and

(iii) sales competitiveness, which refers to novel and diversified marketing methods and the strength of the distribution network.

Set forth below is the historical market share of the Company (excluding MVNO subscribers).

 

						(Unit: in percentages)
Classification		As of March 31, 2024				As of December 31,
						2023				2022
Mobile communication services			46.7				46.7				48.2

 

*	Source: Wireless telecommunications service data from the MSIT as of March 31, 2024.

 

E.	Competitive Strengths

In 2021, the Company successfully completed the Spin-off of SK Square Co., Ltd. from SK Telecom (the “Spin-off”) in order to maximize shareholder value. In the same year, the Company also unveiled its “SKT 2.0” vision to pursue the maximization of its overall enterprise value centered around five major business areas. In November 2022, the Company announced its differentiated “AI Company” vision to further organize and clarify the direction of SKT 2.0 and combine AI with connectivity technologies based on its main telecommunications business. In September 2023, as part of the Company’s effort to transform into a “global AI company,” the Company announced its new “AI Pyramid” strategy, which aims to bring innovation across various industrial and lifestyle areas centered around three key aspects. The AI Pyramid strategy is in the form of a pyramid and integrates a “self-reinforcement model,” which seeks to strengthen the Company’s relationship with its customers through advances in the Company’s AI technology and the creation of AI services, with a “cooperation model,” which focuses on AI-related alliances. Through these initiatives, the Company is striving to transform into a global AI company.

For the three months ended March 31, 2024, the Company recorded Won 4.47 trillion in operating revenue and Won 0.50 trillion in operating profit on a consolidated basis. The increased competitiveness of telecommunications services and the rapid progress in new growth businesses such as B2B have enabled the Company to continue to improve its operating results.

 

4

SK Telink, a consolidated subsidiary of the Company, operates its MVNO service, “SK 7Mobile,” which is offered at reasonable rates and provides excellent quality. SK Telink is increasing its efforts to develop low-cost distribution channels and create niche markets through targeted marketing towards customers including foreign workers, middle-aged adults and students.

SK O&S, a subsidiary of the Company responsible for the operation of the Company’s base stations and related transmission and power facilities, offers quality fixed-line and wireless network services to customers, including mobile office products to business customers. In addition, Service Ace is developing its competence as a marketing company while providing top-quality customer service.

PS&Marketing, a subsidiary of the Company, provides a sales platform for products of the Company and SK Broadband including fixed-line and wireless telecommunications products that address customers’ needs for various convergence products. PS&Marketing provides differentiated service to clients through the establishment of new sales channels and product development.

[Fixed-line Business]

 

A.

Overview

For the three months ended March 31, 2024, SK Broadband recorded Won 1.09 trillion in revenue on a consolidated basis, which represented a 2.7% increase from Won 1.06 trillion for the three months ended March 31, 2023. Such increase was primarily attributable to the growth of SK Broadband’s media business resulting from an increase in the number of subscribers and the growth of its B2B business primarily focused on new data centers.

SK Broadband’s business is divided into the media business segment, which provides IPTV and cable TV services, and the fixed-line business segment, which provides high-speed Internet, telecommunications, leased lines and data center services.

For the three months ended March 31, 2024, the media business segment recorded Won 0.48 trillion in revenue, which represented a 0.9% increase compared to the three months ended March 31, 2023. For the three months ended March 31, 2024, the fixed-line business segment recorded Won 0.61 trillion in revenue, which represented a 4.3% increase compared to the three months ended March 31, 2023.

 

B.	Industry Characteristics

The domestic telecommunications service industry displays the typical characteristics of a domestic industry given that its coverage area is limited to Korea. As a result, the size of the industry is greatly affected by the domestic economic factors including the domestic user population and the level of telecommunications service expenditures in light of the domestic income level. Domestic telecommunications companies may expand overseas through acquisitions or direct expansion, but the overseas telecommunications service industries are subject to inherently different industry characteristics from the domestic one, depending on the regulatory and demand characteristics of each country.

The broadcasting business involves the planning, programming or production of broadcasting programs and transmission to viewers through telecommunications facilities. The broadcasting market can be categorized into terrestrial broadcasting, fixed-line TV broadcasting, satellite broadcasting and programming-providing businesses, in each case pursuant to the Broadcasting Act, as well as Internet multimedia broadcasting business pursuant to the Internet Multimedia Broadcast Services Act. The Company engages in the fixed-line TV broadcasting business, which is defined as the business of managing and operating fixed-line TV broadcasting stations (including their facilities and employees for the purpose of providing multi-channel broadcasting) and providing broadcasts through transmission and line facilities. The Internet multimedia broadcasting refers to the broadcasting of programs through a combination of various contents including data, video, voice, sound and/or e-commerce, including real-time broadcasting, while guaranteeing a consistent service quality through a bidirectional Internet protocol using a broadband integrated information network.

As a result of the government’s direct and indirect control over the fixed-line telecommunications industry, ranging from service licensing to business activities, the industry’s overall growth potential and degree of competition are greatly affected by the government’s regulatory policies. The fixed-line telecommunications industry is also a technology-intensive industry that evolves rapidly and continuously through the development of communications technology and equipment, which requires proactive responses in meeting the needs of subscribers by developing new services and penetrating the market. Fixed-line telecommunications services have become universal and essential means of communication and act as the foundation for integration and convergence with various other services. The essential nature of such services provides stable demand, resulting in low sensitivity to economic conditions.

 

5

In addition, the Korean fixed-line services industry is marked by a high level of market concentration, as the government is highly selective in granting telecommunications business licenses. While the competitive landscape of the fixed-line and wireless services markets is dominated by its three leading operators, the Company (including SK Broadband), KT and LG U+, the intensity of competition is growing as digitalization of communication technologies and devices leads to the convergence of fixed-line and wireless services, as well as broadcasting and telecommunications, and technology for faster data communications services is developed.

In the high-speed Internet services market, the demand for Giga Internet services has been continuing to increase due to the popularization of mobile and home IoT devices and the expansion of large media services including video streaming services.

In the paid broadcasting market, competition for content has been intensifying, at the center of which are large over-the-top operators with strength in exclusive content. Reflecting a rapid change in content consumption patterns and behaviors of viewers, the Company is preparing for new growth in the home platform domain by providing customized services using ICT convergence technologies such as AI and big data in addition to differentiated contents.

In the corporate business market, the Company expects to see growth in new business areas, following the emergence of new services including AI. The Company is continuing its efforts to generate stable returns by strengthening its competitiveness in the traditional fixed line-based business through expansion of core infrastructure including data centers and leased lines, for which market demand has been continually growing.

 

C.	Growth Potential

 

								(Unit: in persons)
Classification				As of March 31,				As of December 31,
				2024				2023				2022
Fixed-line Subscribers		High-speed Internet			24,192,115				24,098,164				23,537,333
		Fixed-line telephone			10,858,211				10,973,838				11,621,413
		IPTV			20,814,402				20,814,402				20,203,451
		Cable TV			12,631,281				12,631,281				12,824,704

 

*	Source: MSIT website.

**	High-speed Internet and fixed-line telephone subscribers represent the number of subscribers as of February 29, 2024, while IPTV and cable TV subscribers represent the average number of subscribers in the first half of 2023.

 

D.	Cyclical Nature and Seasonality

High-speed Internet and fixed-line telephone services operate in mature markets that are comparatively less sensitive to cyclical economic changes as the services provided by different operators have become less differentiated. TV services have become necessities that provide broadcasting, and the market, which is subject to a subscriber-based business model, has little sensitivity to cyclical economic changes.

 

E.	Domestic and Overseas Market Conditions

Set forth below is the historical market share of the Company.

 

						(Unit: in percentages)
Classification		As of March 31,				As of December 31,
		2024				2023				2022
High-speed Internet (including resales)			28.8				28.7				28.5
Fixed-line telephone (including Voice over Internet Protocol (“VoIP”)			18.1				18.0				17.8
IPTV			31.6				31.6				30.9
Cable TV			22.3				22.3				22.2

 

*	Source: MSIT website.

**	With respect to Internet telephone, the market share was calculated based on market shares among the Company, KT and LG U+ and is based on the number of IP phone subscribers.

***	Market shares of High-speed Internet and Fixed-line telephone represent the market shares as of February 29, 2024 and market shares of IPTV and Cable TV represent the average market shares in the first half of 2023.

 

6

The Company is engaged in a number of business areas including high-speed Internet, home telephone, corporate business, IPTV and cable TV pursuant to the relevant communications regulations such as the Telecommunications Business Act, the Internet Multimedia Broadcast Services Act and the Broadcasting Act. In each of its principal business areas, the Company competes on the basis of price, service quality and speed. In the IPTV business, the ability to offer complex services and differentiated contents are becoming increasingly important. General telecommunications businesses operate in a licensed industry with a high barrier of entry, which is dominated by the Company, KT and LG U+.

[Other Businesses]

 

A.	Other businesses

The commercial retail data broadcasting channel business of SK Stoa offers an interactive service that integrates television home shopping and data home shopping services. Such integrated service allows television viewers to organize various product categories on the television screen and select and purchase desired products using a television remote control or mobile device, unlike traditional home shopping services that only allowed for real-time purchase through the relevant broadcast.

Sapeon, an AI semiconductor company, launched “X330,” its next-generation inference AI chip, and plans to further utilize its AI semiconductor capabilities and operational know-how in its efforts to lead the global market in next-generation AI data centers.

2. Key Financial Data by Business Line

 

A.

Assets

 

						(Unit: in millions of Won and percentages)
		As of March 31,								As of December 31,
		2024								2023								2022
Classification		Amount				Ratio				Amount				Ratio				Amount				Ratio
Wireless			25,776,657				76	%			25,608,563				77	%			27,078,021				79	%
Fixed-line			6,959,937				21	%			6,825,342				20	%			6,588,076				19	%
Other			988,015				3	%			910,020				3	%			762,028				2	%
Subtotal			33,724,609				100	%			33,343,925				100	%			34,428,124				100	%
Consolidation Adjustment			(3,428,097	)			—				(3,224,698	)			—				(3,119,862	)			—
Total			30,296,511				—				30,119,227				—				31,308,262				—

 

B.

Revenue

 

						(Unit: in millions of Won and percentages)
Classification		For the three months ended March 31, 2024								For the year ended December 31,
										2023								2022
		Amount				Ratio				Amount				Ratio				Amount				Ratio
Wireless			3,338,838				75	%			13,123,166				75	%			12,942,316				75	%
Fixed-line			1,003,694				22	%			3,928,020				22	%			3,812,989				22	%
Other			132,079				3	%			557,325				3	%			549,668				3	%
Total			4,474,611				100	%			17,608,511				100	%			17,304,973				100	%

 

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C.	Operating Profit

 

						(Unit: in millions of Won and percentages)
Classification		For the three months ended March 31, 2024								For the year ended December 31,
										2023								2022
		Amount				Ratio				Amount				Ratio				Amount				Ratio
Wireless			438,854				86	%			1,463,934				84	%			1,334,306				81	%
Fixed-line			84,825				17	%			329,072				19	%			311,083				19	%
Other			(15,365	)			(3	)%			(42,771	)			(2	)%			(2,102	)			0	%
Subtotal			508,314				100	%			1,750,235				100	%			1,643,287				100	%
Consolidation Adjustment			(9,825	)			—				2,969				—				(31,216	)			—
Total			498,489				—				1,753,204				—				1,612,070				—

3. Updates on Major Products and Services

 

								(Unit: in millions of Won and percentages)
Business		Major Companies		Items		Major Trademarks		For the three months ended March 31, 2024								For the year ended December 31,
																2023								2022
								Consolidated Sales Amount				Ratio				Consolidated Sales Amount				Ratio				Consolidated Sales Amount				Ratio
Wireless		SK Telecom Co., Ltd., PS&Marketing Co., Ltd., Service Ace Co., Ltd. SK O&S Co., Ltd., etc.		Mobile communications service, wireless data service, ICT service		T, 5GX, T Plan and others			3,338,838				75	%			13,123,166				75	%			12,942,316				75	%
Fixed-line		SK Broadband Co., Ltd., SK Telink Co., Ltd. Home & Service Co., Ltd., etc.		Fixed-line phone, high-speed Internet, data and network lease service		B tv, 00700 international call, 7mobile and others			1,003,694				22	%			3,928,020				22	%			3,812,989				22	%
Other		SK stoa Co., Ltd., etc.		Commercial retail data broadcasting channel services and others		Stoa ON			132,079				3	%			557,325				3	%			549,668				3	%
Total									4,474,611				100	%			17,608,511				100	%			17,304,973				100	%

4. Price Trends for Major Products

[Wireless Business]

As of March 31, 2024, based on the Company’s standard monthly subscription plan, the basic service fee was Won 12,100 (including value-added tax) and the usage fee was Won 1.98 per second. Among the 4G-based plans, the “T-Plan Safe 4G” provides 4 GB of data and unlimited voice calls at Won 50,000 per month (including value-added tax). Among the 5G-based plans, the “Basic” plan provides 11 GB of data and unlimited voice calls at Won 49,000 per month (including value-added tax). On June 1, 2023, the Company launched the “5G 0 Youth” plan, which actively reflects the data usage patterns and lifestyle trends of the younger demographics. The Company plans to continue to introduce new services that reach out to different customer segments. The Company provides a variety of other subscription plans catering to subscriber demand, which may be reviewed on the Company’s website at www.tworld.co.kr.

 

8

[Fixed-line Business]

On March 2, 2024, SK Broadband launched the “2030 Direct” plan, which is aimed at cost-conscious customers in their 20s and 30s who feel uncomfortable with entering into long-term subscription plans. Such plan offers Internet services under a one-year subscription plan at a rate comparable to that of a three-year contract. Customers between the age of 18 and 39 who sign up for this plan through SK Broadband’s website, B Direct Shop, or call center, 106 Customer Center, are eligible for a one-year Internet service contract including Wi-Fi at a rate that provides a discount of up to 55% compared to the rate for a non-term contract internet service.

In addition, on March 11, 2024, SK Broadband launched the “Budget-friendly Combination” plan, which offers a discount when bundling SK Broadband’s fixed-line services (Internet and IPTV) and the wireless services of certain MVNOs that lease SK Telecom’s network (including Liiv M Mobile, Eyagi Mobile, Mobing, Toss Mobile and Eyes mobile). This plan provides benefits equivalent to that of the “Modern Family Combination” plan, which bundles SK Broadband’s fixed-line services and SK Telecom’s wireless services. Based on a three-year contract, the plan offers discounts up to Won 14,300, including a Won 13,200 discount on high-speed Internet service fees and a Won 1,100 discount on IPTV fees (when bundled with IPTV services). However, no discounts are offered on the MVNO service fees. SK Broadband plans to further expand the list of MVNOs that can be bundled with the Budget-friendly Combination plan. SK Broadband also provides a variety of other subscription plans based on consumer demand, which may be reviewed on the Company’s website at www.bworld.co.kr.

5. Investment Status

[Wireless Business]

 

A.	Investment in Progress

 

(Unit: in billions of Won)

Purpose of investment

Subject of investment

Investment period

Expected investment amount

Amount already invested

Investment effect

Upgrade/ New installation

Network, systems and others

Year ended December 31, 2024

To be determined

236

Upgrades to the existing services and expanded provision of network services including 5G

 

B.	Future Investment Plan

 

Purpose of investment		Subject of investment		Expected investment for each year						Investment effect
				2024		2025		2026
Upgrade/ New installation		Network, systems and others		To be determined		To be determined		To be determined		Upgrades to the existing services and expanded provision of network services including 5G

[Fixed-line Business]

 

A.	Investment in Progress and Future Investment Plan

 

								(Unit: in billions of Won)
Purpose of investment		Subject of investment		Investment period		Amount already invested		Future investment		Investment effect
Coverage expansion, upgrade of media platform		Network, systems, Internet data center and others		Three months ended March 31, 2024		82		To be determined		Securing subscriber network and equipment; quality and system improvement

 

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6. Revenues

 

				(Unit: in millions of Won)
Business		Sales type		Item				For the three months ended March 31, 2024				For the year ended December 31, 2023				For the year ended December 31, 2022
Wireless		Services		Mobile communication, wireless data, information communication		Export			49,737				169,885				140,642
						Domestic			3,289,101				12,953,281				12,801,674
						Subtotal			3,338,838				13,123,166				12,942,316
Fixed-line		Services		Fixed-line, high-speed Internet, data, lease line service		Export			45,628				178,824				183,812
						Domestic			958,066				3,749,196				3,629,177
						Subtotal			1,003,694				3,928,020				3,812,989
Other		Services		Commercial retail data broadcasting channel services		Export			—				—				—
						Domestic			132,079				557,325				549,668
						Subtotal			132,079				557,325				549,668
Total						Export			95,365				348,709				324,454
						Domestic			4,379,246				17,259,802				16,980,519
						Total			4,474,611				17,608,511				17,304,973

 

		(Unit: in millions of Won)
For the three months ended March 31, 2024		Wireless				Fixed-line				Other				Sub total				Consolidation adjustment				After consolidation
Total sales			3,707,285				1,304,133				145,312				5,156,730				(682,119	)			4,474,611
Internal sales			368,447				300,439				13,233				682,119				(682,119	)			—
External sales			3,338,838				1,003,694				132,079				4,474,611				—				4,474,611
Depreciation and amortization			678,139				243,230				6,491				927,860				(30,710	)			897,150
Operating profit (loss)			438,854				84,825				(15,365	)			508,314				(9,825	)			498,489
Finance profit (loss)																							(61,082	)
Gain from investments in associates and joint ventures																							4,906
Other non-operating profit (loss)																							(1,568	)
Profit before income tax																							440,745

7. Derivative Transactions

 

A.	Current Swap Contract Applying Cash Flow Risk Hedge Accounting

Currency and interest rate swap contracts under cash flow hedge accounting as of March 31, 2024 are as follows:

[SK Telecom]

 

Borrowing date		Hedged item		Hedged risk		Contract type		Financial institution		Duration of contract
July 20, 2007		Fixed rate foreign currency denominated bonds		Foreign currency risk		Cross currency swap		Morgan Stanley and four other banks		July 20, 2007 – July 20, 2027
Mar. 4, 2020		Floating rate foreign currency denominated bonds		Foreign currency and interest rate risks		Cross currency interest rate swap		Citibank		Mar. 4, 2020 – June 4, 2025
June 28, 2023		Fixed rate foreign currency denominated bonds		Foreign currency risk		Cross currency interest rate swap		Citibank, Shinhan Bank, KDB, J.P. Morgan		June 28, 2023 – June 28, 2028

 

10

[SK Broadband]

 

Borrowing date		Hedged item		Hedged risk		Contract type		Financial institution		Duration of contract
June 28, 2023		Non-guaranteed foreign currency denominated bonds (face value of USD 300,000,000)		Foreign currency risk		Cross currency swap		Citibank, Shinhan Bank, KDB, J.P. Morgan		June 28, 2023 –June 28, 2028

8. Major Contracts

None.

9. R&D Investments

Set forth below are the Company’s R&D expenditures.

 

				(Unit: in millions of Won except percentages)
Category				For the three months ended March 31, 2024				For the year ended December 31, 2023				For the year ended December 31, 2022				Remarks
Raw material					11				48				23				—
Labor					30,091				140,790				113,297				—
Depreciation					33,185				137,264				135,604				—
Commissioned service					8,311				51,749				46,447				—
Others					18,499				61,992				78,989				—
Total R&D costs					90,097				391,843				374,360				—
Government Subsidies					—				—				—				—
Accounting  Sales and administrative expenses					88,928				369,507				340,864				—
Development expenses (intangible assets)					1,169				22,334				33,495				—
R&D cost / sales amount ratio (Total R&D costs / Current sales amount×100)					2.01	%			2.23	%			2.16	%			—

10. Other information relating to investment decisions

 

A.	Brand Management Policies

The Company manages its corporate brand and other product brands in a comprehensive way to protect and increase their value. The Company operates an intranet system called “Comm.ON” in order to implement consistent communication with consumers across various areas including branding, design, marketing and public relations, and systematically manages the development, registration and licensing of brands through such system.

 

B.	Business-related Intellectual Property

[SK Telecom]

As of March 31, 2024, the registered patents and trademarks held by the Company included 3,277 Korean-registered patents, 1,769 foreign-registered patents and 725 Korean-registered trademarks. The number of registered patents and trademarks is subject to constant change due to the acquisition of new rights, expiration of terms, abandonments and dispositions.

[SK Broadband]

As of March 31, 2024, SK Broadband held 262 Korean-registered patents and 70 foreign-registered patents (including those held jointly with other companies). It also holds 302 Korean-registered trademarks. SK Broadband owns intellectual property rights to its proprietary graphic design of the alphabet “B” representing its brand. The designed alphabet “B” is registered in all business categories for trademarks (total of 45). The number of registered patents and trademarks is subject to continual change due to the acquisition of new rights, expiration of terms, abandonments and dispositions.

 

11

C.	Business-related Pollutants and Environmental Protection

[SK Telecom]

The Company does not directly engage in any manufacturing and therefore does not undertake any industrial processes that emit pollutants into the air or industrial processes in which hazardous materials are used. Nevertheless, the Company clearly recognizes the severity of the climate crisis and has been diligently fulfilling its social obligations by establishing a systematic and practical environmental management strategy system. Under the vision of “realizing a sustainable future based on ICT” and to achieve Net Zero by 2050, the Company is making efforts to (1) preemptively respond to climate change, (2) improve its environmental management system and (3) create an eco-friendly green culture. To this end, the Company was one of the first information technology companies in Korea to join the RE100 (Renewable Electricity 100%) initiative and signed a green premium contract with Korea Electric Power Corporation. The Company has been implementing company-wide adoption of renewable energy through efforts such as installing solar power generation equipment in its office buildings and base stations. In addition, the Company leads in energy savings and environmental protections based on ICT technology, and recently became the first company in the telecommunications industry to obtain carbon emission rights by reducing greenhouse gas through integration of telecommunications equipment and technology upgrades.

[SK Broadband]

SK Broadband does not directly engage in any manufacturing processes that emit environmental pollutants, and more than 99% of its greenhouse gas emissions is indirect emissions from its use of external electricity. SK Broadband was selected as a business subject to allocation of emission permits as part of Korea’s greenhouse gas emissions trading scheme that commenced in 2015, and it actively fulfills its obligations and consistently achieves the targets set by the government.

In 2021, SK Broadband declared its goal to achieve Net Zero by 2045 in an effort to actively participate in the international community’s response to climate change. Prior to the declaration, SK Broadband had already subscribed to the RE100 initiative in 2020. Since 2021, SK Broadband has participated in Korea Electrical Power Corporation’s renewable energy power purchase program, “Green Premium,” to purchase renewable energy and has installed additional solar power generation facilities to increase the self-production and use of renewable energy.

 

12

III.	FINANCIAL INFORMATION

1. Summary Financial Information (Consolidated and Separate)

 

A.	Summary Financial Information (Consolidated)

Below is the summary consolidated financial information of the Company as of March 31, 2024, December 31, 2023 and December 31, 2022 and for the three months ended March 31, 2024 and for the years ended December 31, 2023 and 2022. The Company’s consolidated financial statements as of March 31, 2024 and December 31, 2023 and for the three months ended March 31, 2024 and 2023, which are prepared in accordance with K-IFRS, are attached hereto.

 

(Unit: in millions of Won except number of companies)
		As of March 31, 2024				As of December 31, 2023				As of December 31, 2022
Assets
Current Assets			7,109,603				6,585,602				7,219,196
•  Cash and Cash Equivalents			1,718,989				1,454,978				1,882,291
•  Accounts Receivable – Trade, net			2,043,694				1,978,532				1,970,611
•  Accounts Receivable – Other, net			421,931				344,350				479,781
•  Others			2,924,989				2,807,742				2,886,513
Non-Current Assets			23,186,908				23,533,625				24,089,066
•  Long-Term Investment Securities			1,803,587				1,679,384				1,410,736
•  Investments in Associates and Joint Ventures			1,971,334				1,915,012				1,889,289
•  Property and Equipment, net			12,621,363				13,006,196				13,322,492
•  Goodwill			2,075,009				2,075,009				2,075,009
•  Intangible Assets, net			2,710,382				2,861,137				3,324,910
•  Others			2,005,233				1,996,887				2,066,630
Total Assets			30,296,511				30,119,227				31,308,262
Liabilities
Current Liabilities			7,258,331				6,993,980				8,046,541
Non-Current Liabilities			10,585,198				10,896,848				11,106,525
Total Liabilities			17,843,529				17,890,828				19,153,066
Equity
Equity Attributable to Owners of the Parent Company			11,658,150				11,389,046				11,318,320
Share Capital			30,493				30,493				30,493
Capital Surplus (Deficit) and Other Capital Adjustments			(11,618,241	)			(11,828,644	)			(11,567,117	)
Retained Earnings			22,727,912				22,799,981				22,463,711
Reserves			517,986				387,216				391,233
Non-controlling Interests			794,832				839,353				836,876
Total Equity			12,452,982				12,228,399				12,155,196
Total Liabilities and Equity			30,296,511				30,119,227				31,308,262

 

(Unit: in millions of Won except per share data and number of consolidated subsidiaries)
		For the three months ended March 31, 2024				For the year ended December 31, 2023				For the year ended December 31, 2022
Operating Revenue			4,474,611				17,608,511				17,304,973
Operating Profit			498,489				1,753,204				1,612,070
Profit Before Income Tax			440,745				1,488,179				1,236,152
Profit from Continued Operations			361,940				1,145,937				947,831
Profit from Discontinued Operations			—				—				—
Profit for the Period			361,940				1,145,937				947,831
Profit for the Period Attributable to Owners of the Parent Company			352,986				1,093,611				912,400
Profit for the Period Attributable to Non-controlling Interests			8,954				52,326				35,431
Basic Earnings Per Share (Won)			1,636				4,954				4,118
Diluted Earnings Per Share (Won)			1,634				4,950				4,116
Total Number of Consolidated Subsidiaries			25				25				25

 

13

B.	Summary Financial Information (Separate)

Below is the summary separate financial information of the Company as of March 31, 2024, December 31, 2023 and December 31, 2022 and for the three months ended March 31, 2024 and for the years ended December 31, 2023 and 2022. The Company’s separate financial statements as of March 31, 2024 and December 31, 2023 and for the three months ended March 31, 2024 and 2023, which are prepared in accordance with K-IFRS, are attached hereto.

 

			(Unit: in millions of Won)
		As of March 31, 2024				As of December 31, 2023				As of December 31, 2022
Assets
Current Assets			5,160,532				4,703,844				5,498,460
•  Cash and Cash Equivalents			885,809				631,066				1,217,504
•  Accounts Receivable – Trade, net			1,521,505				1,495,617				1,425,695
•  Accounts Receivable – Other, net			583,016				343,036				435,096
•  Others			2,170,202				2,234,125				2,420,165
Non-Current Assets			20,036,688				20,292,088				20,933,661
•  Long-Term Investment Securities			1,520,339				1,426,290				1,155,188
•  Investments in Subsidiaries and Associates			4,707,513				4,670,568				4,621,807
•  Property and Equipment, net			8,800,913				9,076,459				9,519,663
•  Goodwill			1,306,236				1,306,236				1,306,236
•  Intangible Assets, net			2,112,636				2,250,829				2,693,400
•  Others			1,589,051				1,561,706				1,637,367
Total Assets			25,197,220				24,995,932				26,432,121
Liabilities
Current Liabilities			5,731,093				5,505,470				6,236,135
Non-Current Liabilities			8,684,936				9,054,369				9,812,604
Total Liabilities			14,416,029				14,559,839				16,048,739
Equity
Share Capital			30,493				30,493				30,493
Capital Surplus and Other Capital Adjustments			(4,557,234	)			(4,766,147	)			(4,506,693	)
Retained Earnings			209,156				15,032,473				14,691,461
Reserves			209,156				139,274				168,121
Total Equity			25,197,220				10,436,093				10,383,382
Total Liabilities and Equity			25,197,220				24,995,932				26,432,121

 

(Unit: in millions of Won)
		For the three months ended March 31, 2024				For the year ended December 31, 2023				For the year ended December 31, 2022
Operating Revenue			3,188,680				12,589,220				12,414,588
Operating Profit			436,427				1,455,870				1,321,131
Profit Before Income Tax			566,591				1,354,939				1,146,250
Profit for the Period			492,106				1,059,750				869,490
Basic Earnings Per Share (Won)			2,290				4,798				3,921
Diluted Earnings Per Share (Won)			2,287				4,794				3,919

 

14

2. Dividends and Others

Omitted in quarterly reports in accordance with applicable Korean disclosure rules. For more information, please refer to the Company’s annual business report for the year ended December 31, 2023.

3. Use of Direct Financing

 

A.	Use of Proceeds from Public Offerings

[SK Telecom]

 

(As of March 31, 2024)

(Unit: in millions of Won)

Category

Bond Series

Payment Date

Planned Use of Proceeds

Actual Use of Proceeds

Reasons for Difference

Use

Amount

Use

Amount

Corporate bond

Series 82-1,2,3

April 12, 2022

Repayment of debt

350,000

Repayment of debt

350,000

—

Corporate bond

Series 83-1

August 10, 2022

Repayment of debt

300,000

Repayment of debt

300,000

—

Corporate bond (ESG bond)

Series 83-2

August 10, 2022

Other (fund investment, etc.)

95,000

Other (investment in funds, etc.)

95,000

—

Corporate bond

Series 84-1,2,3,4

December 14, 2022

Repayment of debt

310,000

Repayment of debt

310,000

—

Corporate bond

Series 85-1,2

February 17, 2023

Repayment of debt

300,000

Repayment of debt

300,000

—

Corporate bond

Series 86-1,2,3

April 12, 2023

Repayment of debt

350,000

Repayment of debt

350,000

—

Hybrid securities

Series 3

June 5, 2023

Repayment of debt

400,000

Repayment of debt

400,000

—

Corporate bond

Series 87-1,2,3,4

October 18, 2023

Repayment of debt

295,000

Repayment of debt

295,000

—

Corporate bond

Series 88-1,2,3,4

February 22, 2024

Repayment of debt

400,000

Repayment of debt

400,000

—

 

*

Series 83-2 issued as of August 10, 2022 is an ESG bond. Series 83-2 was issued in furtherance of the Company’s ESG goal to achieve Net Zero by 2050, and covers solar energy generation equipment in the environment sector, mutual growth funds in the social sector and the SK Telecom-Kakao ESG Fund. The proceeds from the bond offering were intended to refinance prior investments and new investments, and were used for the intended purpose.

[SK Broadband]

 

(As of March 31, 2024)

(Unit: in millions of Won)

Category

Bond Series

Payment Date

Planned Use of Proceeds

Actual Use of Proceeds

Reasons for Difference

Use

Amount

Use

Amount

Corporate bond

Series 52-1

January 25, 2022

Repayment of debt

100,000

Repayment of debt

100,000

—

Corporate bond (green bond)

Series 52-2

January 25, 2022

Repayment of debt

50,000

Repayment of debt

50,000

—

Corporate bond

Series 53-1

March 2, 2023

Operation fund

5,000

Operation fund

5,000

—

Corporate bond

Series 53-1

March 2, 2023

Repayment of debt

45,000

Repayment of debt

45,000

—

Corporate bond

Series 53-2

March 2, 2023

Operation fund

55,000

Operation fund

55,000

—

Corporate bond

Series 53-2

March 2, 2023

Repayment of debt

45,000

Repayment of debt

45,000

—

Corporate bond

Series 53-3

March 2, 2023

Operation fund

46,900

Operation fund

46,900

—

Corporate bond

Series 53-3

March 2, 2023

Repayment of debt

43,100

Repayment of debt

43,100

—

Corporate bond

Series 54-1

October 30, 2023

Facility fund

100,000

Facility fund

100,000

—

Corporate bond

Series 54-2

October 30, 2023

Facility fund

60,000

Facility fund

60,000

—

Corporate bond

Series 55-1

January 22, 2024

Repayment of debt

170,000

Repayment of debt

170,000

—

Corporate bond

Series 55-1

January 22, 2024

Repayment of debt

60,000

Repayment of debt

60,000

—

 

*

Series 52-2 issued as of January 25, 2022 is an ESG bond (green bond). Series 52-2 was issued in furtherance of the Company’s ESG goal for the purpose of repayment of funds raised to be invested in the conversion of hybrid fiber-coaxial network to fiber-to-the-home network, which has a positive impact on the environment, including the reduction of greenhouse gas emissions. The proceeds from the bond offering were used for the intended purpose.

 

15

4. Other Matters Related to Financial Information

 

A.	Restatement of the Financial Statements

Not applicable.

 

B.	Loss Allowance

 

(1)

Loss Allowance of Trade and Other Receivables

 

			(Unit: in millions of Won, except percentages)
		For the three months ended March 31, 2024
		Gross amount				Loss Allowance				Percentage
Accounts receivable – trade			2,312,107				256,020				11.1	%
Loans			154,107				42,109				27.3	%
Accounts receivable – other			773,736				34,740				4.5	%
Accrued income			3,760				—				—
Guarantee deposits			283,196				300				0.1	%
Total			3,526,906				333,169				9.4	%
			(Unit: in millions of Won, except percentages)
		For the year ended December 31, 2023
		Gross amount				Loss Allowance				Percentage
Accounts receivable – trade			2,233,586				242,737				10.9	%
Loans			150,671				42,087				27.9	%
Accounts receivable – other			690,157				33,276				4.8	%
Accrued income			4,295				—				—
Guarantee deposits			286,520				300				0.1	%
Total			3,365,229				318,400				9.5	%
			(Unit: in millions of Won, except percentages)
		For the year ended December 31, 2022
		Gross amount				Loss Allowance				Percentage
Accounts receivable – trade			2,219,695				234,923				10.6	%
Loans			151,155				45,592				30.2	%
Accounts receivable – other			897,920				44,188				4.9	%
Accrued income			1,732				—				—
Guarantee deposits			280,945				300				0.1	%
Total			3,551,447				325,003				9.2	%

 

(2)

Movements in Loss Allowance of Trade and Other Receivables

 

											(Unit: in millions of Won)
		For the three months ended March 31, 2024				For the year ended December 31, 2023				For the year ended December 31, 2022
Beginning balance			318,400				325,003				330,891
Effect of change in accounting policy			—				—				—
Increase of loss allowance			14,949				43,162				30,064
Reversal of loss allowance			—				—				—
Write-offs			(180	)			(49,764	)			(35,955	)
Other			—				—				3
Ending balance			333,169				318,400				325,003

 

(3)

Policies for Loss Allowance

The Company establishes loss allowances based on the likelihood of recoverability of trade and other receivables based on their aging at the end of the period and past customer default experience for the past three years. With respect to trade receivables relating to wireless telecommunications services, the Company considers the likelihood of recovery based on past customer default experience and the length of default in connection with the type of default (e.g., whether the customer’s service has been terminated or is continued). Consistent with customary practice, the Company writes off trade and other receivables for which the prescription period has passed or that are determined to be impossible or economically too costly to collect, including receivables that are less than Won 200,000 and more than six months overdue and receivables that have been determined to be the subject of identity theft.

 

16

(4)

Aging of Accounts Receivable

 

											(Unit: in millions of Won, except percentages)
		As of March 31, 2024
		Six months or less				From six months to one year				From one year to three years				More than three years				Total
Accounts receivable – general			2,049,489				62,418				152,681				47,518				2,312,107
Percentage			88.6	%			2.7	%			6.6	%			2.1	%			100.0	%

 

C.	Inventories

 

(1)

Detailed Categories of Inventories

 

			(Unit: in millions of Won, except percentages)
Account Category		For the three months ended March 31, 2024				For the year ended December 31, 2023				For the year ended December 31, 2022
Merchandise			190,109				166,614				151,303
Goods in transit			—				—				—
Other inventories			20,222				13,195				15,052
Total			210,331				179,809				166,355
Percentage of inventories to total assets [Inventories / Total assets]			0.69	%			0.60	%			0.53	%
Inventory turnover [Cost of sales / { ( Beginning balance of inventories + Ending balance of inventories ) / 2}]			6.77				7.32				6.84

 

(2)

Reporting of Inventories

The Company holds handsets, ICT equipment for offline sales, etc. in inventory. The Company conducts physical due diligence of its inventories with external auditors at the end of each year.

 

D.	Fair Value Measurement

See Note 29 of the notes to the Company’s interim consolidated financial statements attached hereto for more information.

 

E.	Key Terms of Debt Securities

[SK Telecom]

The following are key terms and conditions of bonds issued by the Company. The compliance status is as of the date of the latest financial statements including the audit opinion of the independent auditor applicable to the determination of compliance status, except for the compliance status of the restriction on changes of ownership structure, which is as of the end of the reporting period.

 

Name		Issue Date		Maturity Date		Principal Amount (millions of Won)		Date of Fiscal Agency Agreement		Fiscal Agent
Unsecured Bond – Series 62-3		Aug. 28, 2012		Aug. 28, 2032		90,000		Aug. 22, 2012		Meritz Securities Co., Ltd.

 

Maintenance of Financial Ratio		Key Term		Debt ratio no greater than 300%
		Compliance Status		Compliant
Restriction on Liens		Key Term		The total amount of secured debt not to exceed 100% of share capital as of the end of the previous fiscal year
		Compliance Status		Compliant
Restriction on Disposition of Assets		Key Term		Disposal of assets per fiscal year not to exceed Won 2 trillion
		Compliance Status		Compliant
Submission of Compliance Certificate		Compliance Status		Submitted on April 11, 2024

 

17

Name		Issue Date		Maturity Date		Principal Amount (millions of Won)		Date of Fiscal Agency Agreement		Fiscal Agent
Unsecured Bond – Series 63-2		Apr. 23, 2013		Apr. 23, 2033		130,000		Apr. 17, 2013		Korea Securities Finance Corp.
Unsecured Bond – Series 64-2		May 14, 2014		May 14, 2024		150,000		Apr. 29, 2014		Korea Securities Finance Corp.
Unsecured Bond – Series 65-3		Oct. 28, 2014		Oct. 28, 2024		190,000		Oct. 16, 2014		Korea Securities Finance Corp.
Unsecured Bond – Series 66-2		Feb. 26, 2015		Feb. 26, 2025		150,000		Feb. 11, 2015		Korea Securities Finance Corp.
Unsecured Bond – Series 66-3		Feb. 26, 2015		Feb. 26, 2030		50,000		Feb. 11, 2015		Korea Securities Finance Corp.
Unsecured Bond – Series 67-2		July 17, 2015		July 17, 2025		70,000		July 9, 2015		Korea Securities Finance Corp.
Unsecured Bond – Series 67-3		July 17, 2015		July 17, 2030		90,000		July 9, 2015		Korea Securities Finance Corp.
Unsecured Bond – Series 68-2		Nov. 30, 2015		Nov. 30, 2025		100,000		Nov. 18, 2015		Korea Securities Finance Corp.
Unsecured Bond – Series 68-3		Nov. 30, 2015		Nov. 30, 2035		70,000		Nov. 18, 2015		Korea Securities Finance Corp.
Unsecured Bond – Series 69-3		Mar. 4, 2016		Mar. 4, 2026		90,000		Feb. 22, 2016		Korea Securities Finance Corp.
Unsecured Bond – Series 69-4		Mar. 4, 2016		Mar. 4, 2036		80,000		Feb. 22, 2016		Korea Securities Finance Corp.

 

Maintenance of Financial Ratio		Key Term		Debt ratio no greater than 300%
		Compliance Status		Compliant
Restriction on Liens		Key Term		The total amount of secured debt not to exceed 100% of share capital as of the end of the previous fiscal year
		Compliance Status		Compliant
Restriction on Disposition of Assets		Key Term		Disposal of assets per fiscal year not to exceed Won 2 trillion
		Compliance Status		Compliant
Submission of Compliance Certificate		Compliance Status		Submitted on April 11, 2024

 

Name		Issue Date		Maturity Date		Principal Amount (millions of Won)		Date of Fiscal Agency Agreement		Fiscal Agent
Unsecured Bond – Series 70-3		June 3, 2016		June 3, 2026		120,000		May 24, 2016		Korea Securities Finance Corp.
Unsecured Bond – Series 70-4		June 3, 2016		June 3, 2031		50,000		May 24, 2016		Korea Securities Finance Corp.
Unsecured Bond – Series 71-3		Apr. 25, 2017		Apr. 25, 2027		100,000		Apr. 13, 2017		Korea Securities Finance Corp.
Unsecured Bond – Series 71-4		Apr. 25, 2017		Apr. 25, 2032		90,000		Apr. 13, 2017		Korea Securities Finance Corp.

 

Maintenance of Financial Ratio		Key Term		Debt ratio no greater than 300%
		Compliance Status		Compliant
Restriction on Liens		Key Term		The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
		Compliance Status		Compliant
Restriction on Disposition of Assets		Key Term		Disposal of assets per fiscal year not to exceed Won 5 trillion
		Compliance Status		Compliant
Submission of Compliance Certificate		Compliance Status		Submitted on April 11, 2024

 

18

Name		Issue Date		Maturity Date		Principal Amount (millions of Won)		Date of Fiscal Agency Agreement		Fiscal Agent
Unsecured Bond – Series 72-3		Nov. 10, 2017		Nov. 10, 2027		100,000		Oct. 31, 2017		Korea Securities Finance Corp.
Unsecured Bond – Series 73-2		Feb. 20, 2018		Feb. 20, 2023		100,000		Feb. 6. 2018		Korea Securities Finance Corp.
Unsecured Bond – Series 73-3		Feb. 20, 2018		Feb. 20, 2028		200,000		Feb. 6. 2018		Korea Securities Finance Corp.
Unsecured Bond – Series 73-4		Feb. 20, 2018		Feb. 20, 2038		90,000		Feb. 6. 2018		Korea Securities Finance Corp.
Unsecured Bond – Series 74-2		Sept. 17, 2018		Sept. 17, 2023		150,000		Sept. 5, 2018		Korea Securities Finance Corp.
Unsecured Bond – Series 74-3		Sept. 17, 2018		Sept. 17, 2038		50,000		Sept. 5, 2018		Korea Securities Finance Corp.
Unsecured Bond – Series 75-2		Mar. 6, 2019		Mar. 6, 2024		120,000		Feb. 21, 2019		Korea Securities Finance Corp.
Unsecured Bond – Series 75-3		Mar. 6, 2019		Mar. 6, 2029		50,000		Feb. 21, 2019		Korea Securities Finance Corp.
Unsecured Bond – Series 75-4		Mar. 6, 2019		Mar. 6, 2039		50,000		Feb. 21, 2019		Korea Securities Finance Corp.

 

Maintenance of Financial Ratio		Key Term		Debt ratio no greater than 300%
		Compliance Status		Compliant
Restriction on Liens		Key Term		The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
		Compliance Status		Compliant
Restriction on Disposition of Assets		Key Term		Disposal of assets per fiscal year not to exceed 50% of total assets
		Compliance Status		Compliant
Restriction on Changes of Ownership Structure		Key Term		Restriction of cross-shareholding Exclusion from corporate group
		Compliance Status		Compliant
Submission of Compliance Certificate		Compliance Status		Submitted on April 11, 2024

 

Name		Issue Date		Maturity Date		Principal Amount (millions of Won)		Date of Fiscal Agency Agreement		Fiscal Agent
Unsecured Bond – Series 76-2		July 29, 2019		July 29, 2024		60,000		July 17, 2019		Korea Securities Finance Corp.
Unsecured Bond – Series 76-3		July 29, 2019		July 29, 2029		120,000		July 17, 2019		Korea Securities Finance Corp.
Unsecured Bond – Series 76-4		July 29, 2019		July 29, 2039		50,000		July 17, 2019		Korea Securities Finance Corp.
Unsecured Bond – Series 76-5		July 29, 2019		July 29, 2049		50,000		July 17, 2019		Korea Securities Finance Corp.

 

Maintenance of Financial Ratio		Key Term		Debt ratio no greater than 300%
		Compliance Status		Compliant
Restriction on Liens		Key Term		The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
		Compliance Status		Compliant
Restriction on Disposition of Assets		Key Term		Disposal of assets per fiscal year not to exceed 50% of total assets
		Compliance Status		Compliant
Restriction on Changes of Ownership Structure		Key Term		Restriction of cross-shareholding Exclusion from corporate group
		Compliance Status		Compliant
Submission of Compliance Certificate		Compliance Status		Submitted on April 11, 2024

 

19

Name		Issue Date		Maturity Date		Principal Amount (millions of Won)		Date of Fiscal Agency Agreement		Fiscal Agent
Unsecured Bond – Series 77-2		Oct. 22, 2019		Oct. 22, 2024		70,000		Oct. 10, 2019		Korea Securities Finance Corp.
Unsecured Bond – Series 77-3		Oct. 22, 2019		Oct. 22, 2029		40,000		Oct. 10, 2019		Korea Securities Finance Corp.
Unsecured Bond – Series 77-4		Oct. 22, 2019		Oct. 22, 2039		60,000		Oct. 10, 2019		Korea Securities Finance Corp.

 

Maintenance of Financial Ratio		Key Term		Debt ratio no greater than 300%
		Compliance Status		Compliant
Restriction on Liens		Key Term		The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
		Compliance Status		Compliant
Restriction on Disposition of Assets		Key Term		Disposal of assets per fiscal year not to exceed 50% of total assets
		Compliance Status		Compliant
Restriction on Changes of Ownership Structure		Key Term		Restriction of cross-shareholding Exclusion from corporate group
		Compliance Status		Compliant
Submission of Compliance Certificate		Compliance Status		Submitted on April 11, 2024

 

Name		Issue Date		Maturity Date		Principal Amount (millions of Won)		Date of Fiscal Agency Agreement		Fiscal Agent
Unsecured Bond – Series 78-2		Jan. 14, 2020		Jan. 14, 2025		130,000		Dec. 31, 2019		Korea Securities Finance Corp.
Unsecured Bond – Series 78-3		Jan. 14, 2020		Jan. 14, 2030		50,000		Dec. 31, 2019		Korea Securities Finance Corp.
Unsecured Bond – Series 78-4		Jan. 14, 2020		Jan. 14, 2040		70,000		Dec. 31, 2019		Korea Securities Finance Corp.

 

Maintenance of Financial Ratio		Key Term		Debt ratio no greater than 300%
		Compliance Status		Compliant
Restriction on Liens		Key Term		The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
		Compliance Status		Compliant
Restriction on Disposition of Assets		Key Term		Disposal of assets per fiscal year not to exceed 50% of total assets
		Compliance Status		Compliant
Restriction on Changes of Ownership Structure		Key Term		Restriction of cross-shareholding Exclusion from corporate group
		Compliance Status		Compliant
Submission of Compliance Certificate		Compliance Status		Submitted on April 11, 2024

 

Name		Issue Date		Maturity Date		Principal Amount (millions of Won)		Date of Fiscal Agency Agreement		Fiscal Agent
Unsecured Bond – Series 79-1		Oct. 19, 2020		Oct. 19, 2025		140,000		Oct. 6, 2020		Korea Securities Finance Corp.
Unsecured Bond – Series 79-2		Oct. 19, 2020		Oct. 19, 2030		40,000		Oct. 6, 2020		Korea Securities Finance Corp.
Unsecured Bond – Series 79-3		Oct. 19, 2020		Oct. 19, 2040		110,000		Oct. 6, 2020		Korea Securities Finance Corp.

 

20