SK Networks recorded Q3 revenue of KRW 2.0428 trillion, with an operating profit of KRW 28.6 billion
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2024-11-13
- SK Magic and Walkerhill were at the forefront of profit enhancement. Operating profit increased by 74.9% compared to the previous year.
- The debt-to-equity ratio saw a considerable improvement from selling SK Rent-a-Car and implementing other measures, ultimately stabilizing the financial structure.
- Strategies are set to enhance corporate value by achieving a ROE of 3.5% and providing an annual dividend of at least 250 won per share.
- "Emphasize leveraging AI for business innovation and creating data-driven technologies and services."
SK Networks, an operating holding company focused on AI-centered businesses, revealed its third-quarter earnings, showing increased profitability year over year.
SK Networks, led by CEO Hojeong Lee, recently disclosed its initial financial results for the third quarter, including total revenue of KRW 2.0428 trillion and operating profit of KRW 28.6 billion on the 13th of this month. Sales revenue increased by 13.9%, and operating profit rose by 74.9% when compared to the previous year's figures.
Specifically, SK Magic drove performance enhancement through new product introductions and improved cost efficiency. The Ultra-Small Direct Water Purifier, launched in the first half, continued to attract customer interest, and the 2024 Core 360˚ Air Purifier, introduced in the third quarter, also garnered significant attention. The company streamlined operations by reducing marketing expenses as well.
At Walkerhill, visitor number increased and room occupancy rose due to seasonal services and accommodation packages like Camcnic @ Forest Park, Park Concert, and Pizza Hill Autumn Festival. Additionally, Walkerhill Store, an online retailer of kimchi, HMR products, and living items, observed a boost in sales, contributing to improved financial results.
In addition to these achievements, SK Networks also made proactive portfolio changes in the third quarter to transition into an AI-focused operating holding company. SK Networks sold its ownership in SK Rent-a-Car, resulting in debt settlement, increased cash equivalents, and a significant enhancement in the debt-to-equity ratio, reducing it to 174% from 323% compared to the previous year. Furthermore, SK Speedmate, after being spun off in September to improve management efficiency for each business, implemented an AI car pricing system from Deutsche Automobil Treuhand (DAT), a German automotive data company, and other data solutions, laying the foundation for using AI for business expansion. The trading divisions are expected to be separated in December.
During the final quarter, SK Networks has focused on boosting corporate value through global collaboration and improved communication with the market. In October, SK Networks and Sunway Group, a prominent conglomerate in Malaysia, signed an MOU to investigate different collaboration plans, such as promoting AI-focused business cooperation, creating a joint venture between SK Magic and Sunway, and trading shares between SK Networks and Sunway. Moreover, the company has revealed intentions to raise its return on equity (ROE) to over 3.5% by 2026, which is 1.1 percentage points above the current rate, and issue a yearly dividend of at least 250 won per share. En-core organized En-core Day 2024 to present strategies for supporting the company's AI transformation through data management and utilization plans, alongside automation solutions incorporating generative AI. PhnyX Lab, an AI technology development organization, will also unveil new customer solutions.
In order to speed up its transformation into an AI-focused operating holding company, SK Networks will keep pushing for new ideas by integrating AI into its operations, partnering with AI tech firms, and creating AI and data connection solutions.
An official from SK Networks stated that the company is dedicated to improving the setup of an operating holding company that collaborates with its subsidiaries and boosts their growth with a secure financial framework, aiming to establish a strong corporate stance in a volatile economic setting and foster innovation in AI-driven business strategies.
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Attachment: Sales and profit scale for Q3, 2024 (based on K-IFRS consolidated financial statements)
(Unit: KRW100M)
Category | Q3, 2023 | Q3, 2024 | Year-on-year variation |
Sales | 17,933 | 20,428 | +13.9% |
Operating profit | 164 | 286 | +74.9% |
Net income | 134 | 658 | +390.8% |