SK Networks Sees 15% Drop in Q1 Operating Profit... "Impact of Costs for Launching New AI Brand"
On May 13, SK Networks announced its provisional results, reporting consolidated first-quarter sales of 1.6367 trillion won and operating profit of 16.5 billion won. These figures represent decreases of 21.1% and 15.6%, respectively, compared to the same period last year.
The decline in profit appears to be due to Glowide, which operates the chemical products trading business, reorganizing its trading items to focus on more profitable raw materials, as well as SK Magic's proactive spending in preparation for the launch of a new AI-related brand.
By business segment, Walkerhill Hotel & Resort continued to see strong sales in room accommodation, banquets, and external business, but its profit declined slightly due to increased selling and administrative expenses. SK Magic introduced a limited-edition collaboration water purifier through a partnership with the prestigious French club Paris Saint-Germain FC. SK Speedmate achieved stable profits through its emergency roadside service (ERS) and the revitalization of its parts business. ENCOA recorded higher sales than last year by strengthening its marketing activities. The information and communications business was affected by a decline in device sales compared to the previous year.
Starting in the second quarter, SK Networks plans to accelerate its transformation into an AI company while strengthening operational capabilities across its businesses. On April 23, it held a showcase for its AI wellness robotics brand, NAMUHX. NAMUHX is a brand created by SK Networks, which set the strategic direction and utilized SK Magic's resources. The wellness robot autonomously moves to areas with polluted air to serve as an air purifier and also monitors the user's health status in real time.
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An SK Networks representative stated, "We plan to enhance the value of our AI-centered business holding company by securing core AI technologies, integrating them with existing businesses, and expanding our infrastructure in a balanced manner."
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