SK Square (402340) Q2 2024 earnings summary

Executive summary

• Consolidated net income reached 1,062.1 billion KRW for H1 2024, a turnaround from a net loss of 1,227.8 billion KRW in H1 2023, driven by improved SK hynix earnings and portfolio growth.

• Consolidated operating income rose by KRW 1.5tn year-over-year to KRW 774.8bn, and operating profit reached 1,098.6 billion KRW, compared to an operating loss of 1,373.5 billion KRW in H1 2023.

• Net asset value (NAV) reached KRW 40.9tn, up 23% from the previous quarter, mainly due to the increased value of the SK hynix stake.

• Significant improvement in profitability was driven by strong equity-method gains from SK hynix and cost control across segments.

• Consolidated revenue for H1 2024 was 966.8 billion KRW, down 13.7% year-over-year.

Financial highlights

• Revenue for 2Q 2024 was KRW 468.6bn, with total assets at KRW 19,006.5bn and shareholders' equity at KRW 16,918.4bn.

• Unconsolidated net cash stood at KRW 630.6bn, and a dividend income of KRW 43.8bn was recorded.

• Debt at the unconsolidated level was zero, and the consolidated debt ratio improved to 12.34% from 13.62% at year-end 2023.

• Basic EPS for H1 2024 was 8,091 KRW, compared to -8,713 KRW in H1 2023.

• Cash and cash equivalents at period-end: 1,202.5 billion KRW.

Outlook and guidance

• SK hynix expects further market leadership with increased shipments and mass production of HBM3E products in 2H 2024.

• Continued focus on portfolio optimization and cost efficiency, with expansion into AI and global digital platforms.

• Management expects stable cash flow and further improvement in profitability, leveraging SK hynix’s performance and digital business growth.

• ONE store plans to boost revenue and profitability by launching blockbuster games and expanding globally.