SK Networks announced on August 14 that it recorded consolidated sales of 1.4445 trillion won and an operating profit of 24.8 billion won for the second quarter of this year. Compared to the same period last year, sales decreased by 4.7%, while operating profit fell by 42.4%.
The decline in operating profit is attributed to strategic adjustments in marketing expenses for information and communication, anticipating intensified market competition following the abolition of the Mobile Device Distribution Improvement Act in the second half of last year. Additionally, advertising expenditures for new products from SK Intellix also impacted the results.
Pre-tax profit reached 37.1 billion won, bolstered by increased valuation gains from investments in companies like Upstage and Phoenix Lab. SK Networks invested 25 billion won in Upstage as a lead investor in the Series B round at the beginning of 2024, followed by an additional 47 billion won through a call option and 50 billion won in the Series C round, acquiring an 11.7% stake.
Upstage was recognized for its technology as the only startup selected in the first evaluation of the national AI foundation model project in January.
Phoenix Lab, an AI startup established through SK Networks' early-stage business incubation program, was founded by Choi Sung-hwan, president of SK Networks, who personally recruited promising talents from Stanford University in the U.S. The company has developed and is currently offering 'K-LON', the first generative AI drug development solution based on RAG (Retrieval-Augmented Generation) in South Korea. Recently, it completed a seed investment round of $8 million, led by Menlo Ventures, marking the first instance of a startup from SK Networks' incubation program successfully attracting external investment.
Walkerhill Hotel & Resort reported strong food and beverage sales, supported by over 70% room occupancy. SK Speedmate maintained solid profitability through increased customer visits for maintenance and the discovery of new clients for emergency services. Global trading subsidiary Glowide achieved more than double the operating profit compared to the same period last year, despite geopolitical risks such as U.S. tariffs and the U.S.-Iran conflict. InCross, which joined SK Networks this year, showed growth across all business areas, including expanding its marketing agency services and achieving record sales in the search advertising sector through its subsidiary Mindnock. Data and AI specialist Enkora saw increased revenue in its consulting and solutions divisions, driven by large project acquisitions.
Additionally, SK Intellix enhanced brand recognition and preference for its health platform brand SK Magic by appointing actor Byun Woo-seok as its advertising model. In connection with this, it launched the 'Two Water Purifier', which allows users to choose between mineral and pure water, and the 'MEGA ICE Purifier', which produces ice that is twice the size and harder than regular ice, receiving a positive response from customers.
The wellness robotics brand 'Namux' officially launched 'Safe Care', which uses autonomous driving and vision AI technology to identify intruders and detect hazardous situations, along with a remote monitoring service called 'Live View'.
SK Networks plans to maximize efficiency across its business processes by applying AI while monitoring the unstable domestic and international business environment.
A representative from SK Networks stated, "Despite the expansion of global geopolitical risks and uncertainties in the financial market, we have achieved various results across our business and investment portfolio. Based on a stable financial structure, we will secure the fundamental competitiveness of our business and support the AI transformation of our business and subsidiaries as an AI-centered holding company, accelerating our approach to future innovations with AI."
* This article has been translated by AI.
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