SK Square announced on the 25th that it achieved consolidated financial statements with sales of 1.9 trillion won, operating profit of 3.9 trillion won, and net profit of 3.6 trillion won last year.
SK Square recorded its highest operating profit since its launch in November 2021, thanks to an increase in equity method profits from its subsidiary SK hynix and improvements in its ICT portfolio's profit and loss, marking a return to profitability compared to the previous year. Last year's quarterly net profits for SK Square were 333.3 billion won in the first quarter, 728.8 billion won in the second quarter, 1.1 trillion won in the third quarter, and 1.4 trillion won in the fourth quarter, showing an increase each quarter.
SK Square improved the combined operating loss of its major ICT portfolio by 32%, from 287.1 billion won in 2023 to 194.1 billion won last year. In particular, Tmap Mobility and 11th Street reduced last year's operating losses by nearly half compared to the previous year, aiming for annual EBITDA profitability this year.
First, Tmap Mobility has achieved a 21% growth in mobility data business sectors such as TMAP Auto, usage-based insurance (UBI), and advertising, rapidly transforming into an AI-based mobility data company. Last year's revenue was 322.6 billion won, an increase of 35.5 billion won compared to the previous year, while the operating loss improved by 35.6 billion won to -43.4 billion won. Tmap Mobility plans to further enhance its AI-based location recommendation services this year.
11th Street continued its qualitative growth by restructuring its open market and retail businesses into profitable product categories. The open market segment has recorded operating profit for 11 consecutive months from March of last year to January of this year, significantly improving the direct purchase business's efficiency. As a result, revenue for '24 is projected at 561.8 billion won, a decrease of about 30%, but the operating loss improved significantly by 50.4 billion won to -75.4 billion won. 11th Street plans to strengthen its strategy to enhance sellers' revenues by reinforcing its 'seller-oriented platform' this year.
Content Wave received investments of 150 billion won and 100 billion won from SK Square and CJ ENM, respectively, in November last year for the business combination of Wave and Tving. This allows Wave to improve its existing financial structure and secure future investment resources. Wave plans to launch a globally competitive K-OTT by combining with Tving to provide differentiated content to users.
Meanwhile, SK Square accelerated the liquefaction of non-core assets last year, achieving significant results such as the sale of its equity in Krafton (bringing in 262.5 billion won), the sale of equity in Tmap Mobility, the sale of Dreamus Company's iRiver division, and the sale of content subsidiary Rock Media of ONE store.
Thanks to these management achievements, SK Square's market capitalization, as of the 24th yesterday, reached 13.7 trillion won, nearly doubling in about a year. According to the securities industry, improvements in portfolio profitability and rebalance achievements, along with the execution of aggressive value-up strategies, are being reflected in the stock price.
SK Square plans to continue its debt-free management this year and secure over 1.3 trillion won in cash assets to promote new investments in AI and semiconductors. In particular, it is carefully searching for investment opportunities that can create synergies with SK hynix. At the end of last year, SK Square's cash assets amounted to 536.3 billion won. This year, with anticipated cash inflows from SK hynix dividends (approximately 355 billion won) and proceeds from the sale of remaining equity in SK shieldus (approximately 500 billion won), it aims to secure a total of more than 1.3 trillion won in investment resources through additional liquefaction of non-core assets.
Han Myung-jin, CEO of SK Square, noted, "We have redefined the business strategies for each portfolio through O/I (operational improvement) activities last year and focused on profit and loss improvements," adding, "This year, we will concentrate on profitability-oriented portfolio value enhancements, liquefaction of non-core assets, and strengthening our identity as an investment company, while striving to enhance shareholder value."