SK (034730) Q2 2025 earnings summary

Executive summary

• Advanced materials and IT services drove sales growth among major unlisted subsidiaries, while energy and chemical market softness weighed on consolidated results.

• The group operates as a holding company with diversified businesses in energy, chemicals, IT, semiconductors, bio, and infrastructure, managing over 630 subsidiaries as of June 2025.

• Business is structured into investment and business segments, with investment income from dividends and brand royalties, and business income from IT services and digital transformation.

• Recent years saw major M&A, including SK Materials and SK Ecoplant, and ongoing portfolio restructuring to focus on high-growth sectors like AI, batteries, and green energy.

• The group maintains a strong credit rating (AA+ for bonds, A1 for commercial paper) and is listed on the KOSPI.

Financial highlights

• H1 2025 consolidated revenue: KRW 61.4 trillion; operating profit: KRW 599.3 billion; net profit attributable to owners: KRW 2.9 trillion.

• Consolidated revenue for 2Q25 was KRW 30.14tn, down 2.8% year-over-year; operating profit fell 72.6% YoY to KRW 0.20tn.

• Separate revenue rose 25.0% YoY to KRW 1.00tn, with operating profit up 153.8% YoY to KRW 0.33tn.

• Major unlisted subsidiaries' revenue grew 1.5% YoY and 6.7% QoQ; EBITDA up 5.0% YoY and 8.0% QoQ.

• Basic EPS for H1 2025: KRW 52,584, up from a loss in 2024.

Outlook and guidance

• 2H25 expected to see improved results in advanced materials and IT services, with demand recovery and cost management initiatives.

• The group is accelerating investments in AI, digital, green energy, and advanced materials, aiming for long-term growth.

• Ongoing restructuring and M&A are expected to further optimize the portfolio and improve profitability.

• Management expects continued volatility in global markets but anticipates stable cash flow and improved margins from new growth engines.

• SK pharmteco anticipates profitability improvement in 2H through expanded Big Pharma collaborations and operational enhancements.