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Investments in Associates and Joint Ventures
12 Months Ended
Dec. 31, 2022
Text block [abstract]  
Investments in Associates and Joint Ventures
12.
Investments in Associates and Joint Ventures
(1)    Investments in associates and joint ventures accounted for using the equity method as of December 31, 2022 and 2021 are as follows:
 

 
  
 
 
  
December 31, 2022
 
  
December 31, 2021
 
(In millions of won)
  
Country
 
  
Ownership

(%)
 
  
Carrying
amount
 
  
Ownership
(%)
 
  
Carrying
amount
 
Investments in associates:
  
  
  
  
  
SK China Company Ltd.
     China        27.3      879,527        27.3      793,754  
Korea IT Fund(*1)
     Korea        63.3        324,860        63.3        339,976  
HanaCard Co., Ltd.(*2)
     Korea                      15.0        349,866  
UniSK
     China        49.0        20,839        49.0        19,156  
SK Technology Innovation Company
     Cayman
Islands
 
 
     49.0        69,375        49.0        86,301  
SK MENA Investment B.V.
     Netherlands        32.1        14,296        32.1        15,343  
SK Latin America Investment S.A.
     Spain        32.1        11,961        32.1        14,004  
SK South East Asia Investment Pte. Ltd.
     Singapore        20.0        357,537        20.0        348,782  
Pacific Telecom Inc.(*3)
     USA        15.0        48,542        15.0        43,789  
SM. Culture & Contents Co., Ltd.
     Korea        23.1        59,611        23.1        60,261  
Digital Games International Pte. Ltd.(*4)
     Singapore                      33.3        2,208  
Invites Healthcare Co., Ltd.(*5)
     Korea        31.1               27.1        26,474  
Nam Incheon Broadcasting Co., Ltd.
     Korea        27.3        13,575        27.3        12,525  
Home Choice Corp.(*3)
     Korea        17.8        4,456        17.8        3,052  
Konan Technology Inc.
     Korea        20.8        8,366        26.5        3,639  
CMES Inc.(*3,6)
     Korea        7.7        900                
12CM JAPAN and others(*3,7)
                   69,734               68,966  
                      
 
 
             
 
 
 
                         1,883,579                 2,188,096  
                      
 
 
             
 
 
 
Investments in joint ventures:
                                            
Finnq Co., Ltd.(*8)
     Korea                      49.0        7,255  
UTC
Kakao-SK
Telecom ESG Fund(*9)
     Korea        48.2        5,710        48.2        2,000  
                      
 
 
             
 
 
 
                         5,710                 9,255  
                      
 
 
             
 
 
 
                       1,889,289               2,197,351  
                      
 
 
             
 
 
 
 
 
(1)
Investments in associates and joint ventures accounted for using the equity method as of December 31, 2022 and 2021 are as follows, Continued:
 
(*1)
Investment in Korea IT Fund was classified as investment in associates as the Group does not have control over the investee under the contractual agreement with other shareholders.
 
(*2)
The Group disposed the entire shares of HanaCard Co., Ltd. to Hana Financial Group Inc. for ₩330,032 million in cash and recognized ₩48,693 million of loss on disposal of investments in associates for the year ended December 31, 2022.
 
(*3)
Although the Group holds less than 20% of equity interests in these investees, investments in such investees were classified as investments in associates as the Group can exercise significant influence through its right to appoint the members of the Board of Directors.
 
(*4)
The Group disposed the entire shares of Digital Games International Pte. Ltd. and recognized ₩1,462 million of gain on disposal of investments in associates for the year ended December 31, 2022.
 
(*5)
The Group recognized the carrying amount of investments in Invites Healthcare Co., Ltd. in entirety as an impairment loss for the year ended December 31, 2022.
 
 
(*6)
As the Group obtained significant influence over the investee, ₩900 million of financial assets at FVOCI are reclassified to investments in associates for the year ended December 31, 2022.
 
(*7)
The Group additionally contributed ₩2,000 million in cash to Smart SKT Infinitum Game Fund for the year ended December 31, 2022. In addition, the Group disposed the shares of
Start-up
Win-Win
Fund (₩4,850 million) at ₩5,800 million in cash and recognized ₩950 million of gain on disposal of investments in associates, accordingly. The Group also disposed the shares of Daekyo Wipoongdangdang Contents Korea Fund (₩1,080 million) at ₩1,080 million in cash and reclassified the entire shares as
non-current
assets held for sale. Furthermore, the Group newly invested ₩4,000 million in cash to KB ESG Fund of three telecommunications companies for the year ended December 31, 2022.
 
(*8)
The Group disposed the entire shares of Finnq Co., Ltd. to Hana Financial Group Inc. for ₩5,733 million in cash and recognized ₩1,043 million of gain on disposal of investments in joint ventures for the year ended December 31, 2022.
 
(*9)
The Group additionally contributed ₩4,000 million in cash to the investee for the year ended December 31, 2022, but there is no change in the ownership interest. As the Group has a joint control over the investee pursuant to the agreement with the other shareholders, the investment in the investee was classified as investments in joint ventures.
(2)    The market value of investments in listed associates as of December 31, 2022 and 2021 are as follows:
 
(In millions of won, except for share data)
 
December 31, 2022
   
December 31, 2021
 
 
Market price
per share

(in won)
   
Number of
shares
   
Market value
   
Market price

per share

(in won)
   
Number of
shares
   
Market value
 
SM.Culture & Contents Co.,Ltd.
    2,960       22,033,898       65,220       4,485       22,033,898       98,822  
Konan Technology Inc.
    28,250       1,179,580       33,323                    
(3)    The condensed financial information of significant associates as of and for the years ended December 31, 2022, 2021 and 2020 are as follows:
 
        
(In millions of won)
  
Korea IT

Fund
   
SK China

Company
Ltd.(*)
   
SK South East Asia
Investment Pte.
Ltd.(*)
 
                    
    
As of December 31, 2022
 
Current assets
   98,132       1,223,426       146,589  
Non-current
assets
     414,804       2,050,001       3,034,335  
Current liabilities
           76,654       488,132  
Non-current
liabilities
           276,525        
   
    
2022
 
Revenue
   19,916       62,334       72,658  
Profit (loss) for the year
     7,505       (11,681     (17,504
Other comprehensive income (loss)
     (11,779     58,034       (34,220
Total comprehensive income (loss)
     (4,274     46,353       (51,724
 
 
(In millions of won)
  
HanaCard

Co., Ltd.(*)
    
Korea IT

Fund
   
SK China

Company
Ltd.(*)
    
SK South East Asia
Investment Pte.
Ltd.(*)
 
                            
    
As of December 31, 2021
 
Current assets
   9,130,044        117,172       1,124,219        133,110  
Non-current
assets
     465,333        419,632       1,849,102        2,853,184  
Current liabilities
     1,281,783              53,199        412,962  
Non-current
liabilities
     6,284,587              316,470         
   
    
2021
 
Revenue
   1,270,568        58,741       80,241        9,945  
Profit (loss) for the year
     250,484        50,107       933,475        (188,678
Other comprehensive income (loss)
     909        (6,847     326,661        304,700  
Total comprehensive income
     251,393        43,260       1,260,136        116,022  
 
(In millions of won)
  
SK hynix
Inc.(*)
   
HanaCard

Co., Ltd.(*)
   
Korea IT
Fund
    
SK China
Company
Ltd.(*)
    
SK South East Asia
Investment Pte.
Ltd. (*)
 
                                  
    
As of December 31, 2020
 
Current assets
   16,570,953       7,910,517       107,652        380,413        797,045  
Non-current
assets
     54,602,900       298,438       402,812        1,706,634        1,672,412  
Current liabilities
     9,072,360       897,594              51,025        67  
Non-current
liabilities
     10,192,396       5,531,968              308,606         
   
    
2020
 
Revenue
   31,900,418       1,231,815       52,330        107,791         
Profit (loss) for the year
     4,758,914       154,521       36,615        20,369        (158,680
Other comprehensive income (loss)
     (107,378     (4,283     9,647        42,921        (390,851
Total comprehensive income (loss)
     4,651,536       150,238       46,262        63,290        (549,531
 
(*)
The financial information of SK hynix Inc., HanaCard Co., Ltd., SK China Company Ltd. and SK South East Asia Investment Pte. Ltd. are consolidated financial information.
(4)    There are no significant joint ventures as of December 31, 2022 and 2021, the condensed financial information of significant joint ventures as of and for the years ended December 31, 2020 are as follows:
 
(In millions of won)
  
Dogus Planet, Inc.
    
Finnq Co., Ltd.
 
               
    
As of December 31, 2020
 
Current assets
   55,951        26,781  
Cash and cash equivalents
     9,083        23,936  
Non-current
assets
     30,408        8,530  
Current liabilities
     46,186        7,367  
Accounts payable, other payables and provisions
     28,145        5,094  
Non-current
liabilities
     10,031        879  
 
    
2020
 
Revenue
   177,084       3,937  
Depreciation and amortization
     (4,642     (4,417
Interest income
     1,878       29  
Interest expense
     (555     (51
Profit (loss) for the year
     7,030       (19,426
Total comprehensive loss
     (1,659     (19,426
(5)    Reconciliations of financial information of significant associates to carrying amounts of investments in associates in the consolidated financial statements as of December 31, 2022 and 2021 are as follows:
 
(In millions of won)
  
December 31, 2022
 
    
Net assets
    
Ownership
interests
(%)
    
Net assets
attributable to
the ownership
interests
    
Cost-book
value
differentials
    
Carrying
amount
 
Korea IT Fund
   512,936        63.3        324,860               324,860  
SK China Company Ltd.(*)
     2,920,248        27.3        796,387        83,140        879,527  
SK South East Asia
Investment Pte. Ltd.(*)
     1,787,685        20.0        357,537               357,537  
   
(In millions of won)
  
December 31, 2021
 
    
Net assets
    
Ownership
interests
(%)
    
Net assets
attributable to
the ownership
interests
    
Cost-book
value
differentials
    
Carrying
amount
 
HanaCard Co., Ltd.
   2,029,007        15.0        304,351        45,515        349,866  
Korea IT Fund
     536,804        63.3        339,976               339,976  
SK China Company Ltd.(*)
     2,603,336        27.3        709,961        83,793        793,754  
SK South East Asia
Investment Pte. Ltd.(*)
     1,743,908        20.0        348,782               348,782  
 
(*)
Net assets of these entities represent net assets excluding those attributable to their
non-controlling
interests.
 
 
(6)    Details of the changes in investments in associates and joint ventures accounted for using the equity method for the years ended December 31, 2022 and 2021 are as follows:
 
(In millions of won)
  
2022
 
    
Beginning
balance
    
Acquisition
and
Disposal
   
Share of
profit

(loss)
   
Other

compre-
hensive

income
(loss)
   
Other
increase

(decrease)
   
Ending
balance
 
Investments in associates:
                                                 
SK China Company Ltd.
   793,754              (19,395     105,168             879,527  
Korea IT Fund(*1)
     339,976              4,753       (7,459     (12,410     324,860  
HanaCard Co., Ltd.
     349,866        (368,389     17,749       774              
UniSK
     19,156              2,424       (741           20,839  
SK Technology Innovation Company
     86,301              (22,923     5,997             69,375  
SK MENA Investment B.V.
     15,343              (2,059     1,012             14,296  
SK Latin America Investment S.A.
     14,004              (2,083     40             11,961  
SK South East Asia Investment Pte. Ltd.
     348,782              (6,975     15,730             357,537  
Pacific Telecom Inc.
     43,789              2,890       1,863             48,542  
SM. Culture & Contents Co., Ltd.
     60,261        37       (756     69             59,611  
Digital Games International Pte. Ltd.
     2,208        (1,757     (562     111              
Invites Healthcare Co., Ltd.(*2)
     26,474              (11,759     (74     (14,641      
Nam Incheon Broadcasting Co., Ltd.(*1)
     12,525              1,186             (136     13,575  
Home Choice Corp.
     3,052              1,403       1             4,456  
Konan Technology Inc.
     3,639        5,451       (710     (14           8,366  
CMES Inc.(*3)
                              900       900  
12CM JAPAN and others(*4)
     68,966        1,873       1,245             (2,350     69,734  
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
       2,188,096        (362,785     (35,572     122,477       (28,637     1,883,579  
Investments in joint ventures:
                                                 
Finnq Co., Ltd.
     7,255        (3,840     (3,617     202              
UTC
Kakao-SK
Telecom ESG Fund
     2,000        4,000       (290                 5,710  
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
       9,255        160       (3,907     202             5,710  
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
     2,197,351        (362,625     (39,479     122,679       (28,637     1,889,289  
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
 
 
(*1)
Dividends distributed by the associates are deducted from the carrying amount for the year ended December 31, 2022.
 
(*2)
The Group recognized ₩14,641 million of impairment loss for the year ended December 31, 2022.
 
(*3)
As the Group obtained significant influence over the investee, ₩900 million of financial assets at FVOCI are reclassified to investments in associates for the year ended December 31, 2022.
 
(*4)
The acquisition for the year ended December 31, 2022 includes ₩2,000 million of cash investment in Smart SKT Infinitum Game Fund, ₩4,000 million of cash investment in KB ESG Fund of three telecommunications companies and ₩12 million of cash investment in SK VENTURE CAPITAL, LLC. The disposal for the year ended December 31, 2022 includes ₩4,850 million relating to disposal of the part of shares of
Start-up
Win-Win
Fund and ₩1,080 million relating to disposal of the part of shares of Daekyo Wipoongdangdang Contents Korea Fund. In addition, dividends amounting to ₩1,290 million received from
Start-up
Win-Win
Fund deducted from the carrying amount for the year ended December 31, 2022.
 
 
(In millions of won)
 
2021
 
   
Beginning

balance
   
Acquisition

and

Disposal
   
Share of

profits

(losses)
   
Other

compre-
hensive

income

(loss)
   
Other

increase

(decrease)
   
Spin-off
   
Ending

balance
 
 
 
Investments in associates:
                                                       
SK China Company Ltd.(*1)
  555,133             274,066       95,696       (131,141           793,754  
Korea IT Fund(*1)
    323,294             31,734       (4,336     (10,716           339,976  
HanaCard Co., Ltd.
    314,930             35,057       (121                 349,866  
SK Telecom CS T1 Co., Ltd.(*2)
    53,010       4,888       (8,769     (575           (48,554      
NanoEnTek, Inc.(*2)
    43,190             1,836       (86           (44,940      
UniSK
    15,700             1,475       1,981                   19,156  
SK Technology Innovation Company
    41,579             39,256       5,466                   86,301  
SK MENA Investment B.V.
    14,043             2       1,298                   15,343  
SK hynix Inc.(*1,2)
    12,251,861       19,482       1,542,757       197,473       (170,937     (13,840,636      
SK Latin America Investment S.A.
    13,930             (49     123                   14,004  
Grab Geo Holdings PTE. LTD.(*2)
    30,063                               (30,063      
SK South East Asia Investment Pte. Ltd.
    311,990             (18,218     55,010                   348,782  
Pacific Telecom Inc.
    39,723             1,598       2,468                   43,789  
SM. Culture & Contents Co., Ltd.
    62,248       144       (2,484     353                   60,261  
Contents Wavve Co., Ltd.(*2)
    75,803       100,000       (20,716                 (155,087      
Hello Nature Co., Ltd.(*2,3)
    11,969       9,980       (10,899     (1     (1,730     (9,319      
Digital Games International Pte. Ltd.
    6,449             (4,529     288                   2,208  
Invites Healthcare Co., Ltd.
    25,536       7,000       (5,968     (94                 26,474  
Nam Incheon Broadcasting Co., Ltd.(*1)
    10,902             1,759             (136           12,525  
NANO-X
IMAGING LTD.(*2)
    28,484       (47     (2,049           2,437       (28,825      
Home Choice Corp.
    3,585             (533                       3,052  
Carrot General Insurance Co., Ltd.(*4)
    13,469       12,289       (6,666     (358     (8,734     (10,000      
Bertis Inc.(*2)
          15,739       (423                 (15,316      
UT LLC(*2)
          86,319       (7,773                 (78,546      
SPARKPLUS Co., Ltd.(*2)
          34,166                         (34,166      
Konan Technology Inc.
    1,265       2,015       357       2                   3,639  
12CM JAPAN and others(*2,5)
    64,485       7,023       (3,226     7,691       (1,624     (5,383     68,966  
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
      14,312,641       298,998       1,837,595       362,278       (322,581     (14,300,835     2,188,096  
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
 
(In millions of won)
 
2021
 
   
Beginning

balance
   
Acquisition

and

Disposal
   
Share of

profits

(losses)
   
Other

compre-
hensive

income

(loss)
   
Other

increase

(decrease)
   
Spin-off
   
Ending

balance
 
 
Investments in joint ventures:
                                                       
Dogus Planet, Inc.(*2)
    15,071             (6,990     (1,447           (6,634      
Finnq Co., Ltd.
    13,342             (5,969     (118                 7,255  
NEXTGEN BROADCAST SERVICES CO, LLC(*2)
    5,850       9,048       (1,276           892       (14,514      
NEXTGEN ORCHESTRATION, LLC(*2)
    1,600                         142       (1,742      
Techmaker GmbH(*2)
    5,609             (94     145             (5,660      
WAVVE Americas Inc. (Formerly, Korea Content Platform, Inc.)(*2)
          30,191       (14           598       (30,775      
UTC
Kakao-SK
Telecom ESG Fund
          2,000                               2,000  
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
      41,472       41,239       (14,343     (1,420     1,632       (59,325     9,255  
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
    14,354,113       340,237       1,823,252       360,858       (320,949     (14,360,160     2,197,351  
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
 
 
(*1)
Dividends received from the associates are deducted from the carrying amount for the year ended December 31, 2021.
 
(*2)
Investment in SK Telecom CS T1 Co., Ltd. and twenty-three other associates and joint ventures were transferred to the
spin-off
company for the year ended December 31, 2021. In addition, profit or loss related to investments in associates and joint ventures, which are transferred to the
spin-off
company, are included in profit or loss from discontinued operations.
 
(*3)
The Group recognized ₩1,730 million of impairment loss for the investments in Hello Nature Co., Ltd. for the year ended December 31, 2021.
 
(*4)
The Parent Company has entered into an agreement whereby the entire shares of Carrot General Insurance Co., Ltd. will transfer to Tmap Mobility Co., Ltd. In accordance with the agreement, the Parent Company reclassified the investments in Carrot General Insurance Co., Ltd. amounting to ₩ 8,734 million as
non-current
assets held for sale (See note 40). Meanwhile, the investment in Carrot General Insurance Co., Ltd. amounting to ₩10,000 million owned by Tmap Mobility Co., Ltd., a subsidiary of the Parent Company before
spin-off,
were transferred to the
spin-off
company for the year ended December 31, 2021.
 
(*5)
The acquisition for the year ended December 31, 2021 includes ₩1,000 million of cash investment in Studio Yesone Co., Ltd. and ₩1,000 million of cash investment in SONNORI Corp. and ₩687 million of cash investment in WALDEN SKT VENTURE FUND and ₩3,000 million of cash investment in Smart SKT Infinitum Game Fund and ₩1,600 million of cash investment in Laguna Dynamic Game&Contents Fund. The disposal for the year ended December 31, 2021 includes ₩334 million relating to disposal of the part of shares of KDX Korea Data Exchange.
 
(7)
The Group discontinued the application of equity method to the following investees due to their carrying amounts being reduced to zero. The details of cumulative unrecognized equity method losses as of December 31, 2022 are as follows:
 
 
(In millions of won)
  
Unrecognized loss
    
Unrecognized change in equity
 
    
2022
    
Cumulative loss
    
2022
    
Cumulative loss
 
Wave City Development Co., Ltd.
   152        8,695                
Daehan Kanggun BcN Co., Ltd. and others
            5,780               (124
    
 
 
    
 
 
    
 
 
    
 
 
 
     152        14,475               (124