SK Networks generated an operating profit of KRW 62.4B in Q1 of 2024, a 1.5% increase YoY.
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2024-05-13
- Consistent performance in every industry, particularly in the hotel sector with exceptional accomplishments.
- Some significant steps towards becoming an AI-focused company involve hosting business briefing sessions and setting up relevant organizations.
- "We plan to increase shareholder value by speeding up the establishment of AI-focused businesses and ensuring financial stability."
During the first quarter, SK Networks focused on strengthening its abilities to transition into an artificial intelligence (AI) company, maintaining steady performance amidst uncertain economic circumstances globally and domestically.
SK Networks (CEO: Hojeong Lee) revealed on the 13th that the company achieved consolidated sales of KRW2.4769 trillion and an operating profit of KRW62.4 billion in the first quarter through a provisional earnings announcement. Sales and operating profit grew by 3.6% and 1.5%, respectively, compared to the same period last year. The basic level of competitiveness was sustained in all sectors, with the hotel industry specifically experiencing significant profit growth.
Following the renovation and reopening of THE BUFFET at Walkerhill at the end of last year, the hotel experienced an increase in both guests and customers at food and beverage outlets thanks to staycation deals and spring events. Incheon Airport lounge and transit hotel sales also saw strong growth due to the resurgence in overseas travel demand.
In the case of SK Rent-a-Car, sales and profits decreased year over year because of a reduction in the quantity of vehicles in operation and the volume of pre-owned cars sold. SK Magic experienced a small drop in sales due to decreased growth in new rental accounts, but boosted its future prospects by introducing the ultra-compact water purifier, which won this year’s CES Innovation Award, and establishing an AI division.
The implementation of a new compensation program by MINTIT, an AI-driven platform for buying and selling secondhand mobile phones, had an impact on their operations. Similarly, Speedmate, a company specializing in automotive maintenance and repair, achieved positive outcomes in their maintenance and emergency response services (ERS) divisions.
During the initial three months of this year, SK Networks materialized its shift towards becoming an AI company by adopting an AI-focused business model company-wide. During the February Annual General Meeting (AGM), the company revealed plans for SK Magic, Encore, and Walkerhill to launch new products and services through technological advancements. Later on, “PhnyX Lab," a research center specializing in the development, service verification, and market testing of AI technologies, was established in Silicon Valley to internalize SK Networks' AI capabilities. At the start of the year, SK Networks made an investment in "Upstage," a startup that utilizes the nation's leading AI organization to gain exclusive advantages in the private LLM market, creating potential synergy with its own businesses.
Furthermore, SK Networks actively engaged in activities to return value to shareholders. The standard dividend of KRW120 per common share was increased to KRW200. In addition, after canceling a significant amount of treasury stocks last year, the company proceeded to cancel treasury stocks valued at KRW77 billion this year.
SK Networks plans to expedite the establishment of an AI-centric business model in the future while constantly monitoring internal and external factors. The company will also focus on enhancing financial stability through the sale of SK Rent-a-Car shares and other initiatives. By doing this, the company aims to increase value for its investors and other stakeholders and evolve into a company that will keep expanding.
