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- Revenue and operating profit fell in comparison to the same period last year; the key point is to emphasize qualitative growth amid industry uncertainty

- Expectations for achievements from the wellness robotics brand NAMUH^X and other AI.Device strategies

- ”Our aims are to achieve sustainable growth via robust operations and the exploration of AI-integrated models for specific business units.”

SK Networks experienced a robust first quarter, reinforcing its stable business framework amid the effects of domestic and global economic declines, while establishing a foundation for its transformation into an artificial intelligence (AI) company. This has impacted immediate performance; nevertheless, it has firmly bolstered long-term growth potential. 

SK Networks, under the leadership of CEO Hojeong Lee, reported consolidated revenues of KRW 1.64 trillion and an operating profit of KRW 16.5 billion for the first quarter, according to a preliminary statement issued on the 13th. These figures indicate decreases of 21.1% and 15.6%, respectively, in comparison to the same period last year. This is considered to stem from Glowide's reorganization of product categories that emphasize profitable raw materials in chemical product trading, along with SK Magic's preemptive cost management for introducing new AI-related brands. 

Examining each business segment, Walkerhill Hotels & Resorts maintained strong revenue from room bookings, banquets, and outside projects, yet profits experienced a slight decline due to higher sales and general administrative (SG&A) expenses. SK Magic garnered favorable reactions for its exclusive collaborative water purifier developed in conjunction with the renowned French football club Paris Saint-Germain FC. SK Speedmate secured consistent profits through its emergency roadside services (ERS) and revitalized parts market, while En-core noted higher sales than last year despite being in an off-peak period by boosting its marketing efforts. The ICT Marketing business, however, experienced a decline in device sales compared to the previous year.

In the second quarter, SK Networks is enhancing total operational capabilities and expediting the execution of strategies designed to leap as an AI company. A demonstration for NAMUH^X, its AI wellness robotics brand, took place on the 23rd of last month, garnering notable attention from industry participants. NAMUH^X is a brand developed from the resources of SK Magic, strategically guided by SK Networks, and it engages in its own brand communication, focusing on innovative functionalities and services that set it apart from SK Magic's current offerings. In the demonstration, the wellness robot showcased its skills by independently navigating to locations with air pollution, surpassing the effectiveness of three stationary air purifiers while monitoring users' health conditions in real-time, impressing those present. With the robot set to officially debut in July, NAMUH^X aims to transform into an AI wellness platform that will provide comprehensive services, including tailored health management, emotional support, and spatial security in the future. The brand also intends to expand internationally, beginning with the United States and Malaysia. 

PhnyX Lab, which launched the nation’s first modular RAG (retrieval augmented generation) AI solution for the pharmaceutical industry called Cheiron last December, has helped AI development of the NAMUH^X wellness robot and is getting ready to enter the market by creating customized partnerships with pharmaceutical companies and adding new features. Walkerhill has introduced the Walkerhill AI Guide, an interactive guidance platform leveraging OpenAI's GPT-4o, while SK Speedmate is working on implementing AI-driven automated estimation systems to use in damaged car repairs and other services. 

SK Networks is committed to creating a resilient and competitive business portfolio while carefully observing the volatile shifts in the industry landscape. The company intends to harmonize the procurement of essential AI technologies, integration with existing operations, and infrastructure growth to increase the value of its AI-focused holding company. An official from SK Networks remarked, “The first quarter marked a time when the company established a strong foundation for its complete shift towards becoming an AI company, concentrating on boosting the inherent competitiveness of its current business units and turning future growth strategies into reality.” The official emphasized, “In the latter part of the year, we will assist in the successful rollout of NAMUH^X and generate new value by improving the AI integration effects for specific business segments. This will demonstrate that SK Networks is progressing toward the vision of “civilization of humanity through AI democratization.””

Attachment: Sales and profit scale for Q1, 2025 (based on K-IFRS consolidated financial statements)     (Unit: KRW100M)