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- Q4 operating profit rose by 60.5% year-over-year, attributed to increased revenue from SK Magic and the ICT marketing sector. 

- The important significance lies in establishing a solid financial framework through business portfolio realignment and in reinforcing the foundation for AI development. 

- “Strengthen our AI-focused growth strategy and transform into a robust operational company.”

SK Networks, transforming into an operational holding company centered on artificial intelligence (AI), achieved significant operating profit last year despite worldwide economic challenges and an unstable domestic economy by realigning its business portfolio and enhancing profitability. 

SK Networks, led by CEO Hojeong Lee, revealed its preliminary financial results last Tuesday, disclosing KRW 1.8489 trillion in revenue and KRW 36.7 billion in operating profit for Q4 2024 on a consolidated basis. On a year-on-year basis, revenue decreased by 8.8%, while operating profit increased by 60.5%. The adjustment in the launch timing of new mobile phone models led to a minor drop in sales, yet profitability improved. (Net income experienced declines due to the valuation of investment assets and also because the retirement of assets from the shutdown of the SK Magic home appliance business was recorded in the accounting.) 

Consequently, the yearly cumulative results were KRW 7.6573 trillion in revenue and KRW 113.9 billion in operating income. It is noted that the company's revenue (increased by 2.7%) and operating profit (rose by 41.4%) both improved as it effectively restructured its business portfolio and boosted profitability throughout its operations during the year. 

In the final quarter of the previous year, SK Magic exhibited strong results due to high renewal rates from current customers, even with growing competition in the industry. Specifically, the recently introduced 9.5 cm wide New Mini water purifier and Full Stainless Sterilizing Bidet featuring an electrolyzed water sterilization capability were launched and received favorable feedback from the market. In the hospitality industry, the “Walkerhill Park Concert,” recognized as cultural content in the downtown area, along with the “Christmas Package” and “Lovely Strawberry,” gained popularity. Regarding the ICT marketing, enhanced cost efficiency, most notably in logistics, led to an increase in profits. 

Annually, 2024 was a time for establishing a solid financial framework by refining the company’s business portfolio and setting the stage for innovation across various operations. In this context, SK Rent-a-Car was sold to facilitate SK Networks’ shift into an AI-focused operating holding company, while Speedmate and Trading division were divided into two separate entities. Phnyx Lab, an AI firm located in Silicon Valley, U.S., presented a generative AI solution focused on healthcare and pharmaceuticals utilizing modular RAG technology to industry partners, affirming the potential for creating tailored products optimized for various companies in the future. SK Networks also revealed a strategy to boost its return on equity (ROE) to a minimum of 3.5% by 2026 to enhance corporate value and provide a consistent annual dividend. 

This year, SK Networks plans to build a crisis-resilient business model based on solid fundamentals while driving innovation and profitability through the application of AI to its operations. "2024 was a year in which we laid the foundation for becoming an AI-centered operating holding company by adjusting our business portfolio," said Hojeong Lee, CEO of SK Networks. "This year, we will solidify our growth path associated with AI across various operations and build a company with stronger operational efficiency than any other competitor, aiming for a sustainable future," he emphasized. 

Attachment: Total sales and profit scale for Q4 and the annual total for 2024 (according to K-IFRS consolidated financial statements)

(1) Q4, 2024
                                (Unit: KRW100M)

(2) annual total, 2024
                                (Unit: KRW100M)