Socar Accelerates Growth with 'Socar 2.0' Strategy

Seoul, South Korea—South Korean car-sharing company Socar Inc (403550. KS) reported an 18.6% year-on-year increase in second-quarter revenue for its core car-sharing business, driven by its "Socar 2.0" strategy, which aims to maximize vehicle and user lifetime value.

Socar's car-sharing revenue, including short-term rentals and its Socar Plan service, rose to KRW 91.4 billion (US$67.2 million) from KRW 77 billion (US$56.6 million) a year earlier, the company said in a regulatory filing on Sunday.

Key points:

• Gross profit margin improved to 16.9% in Q2 from 14.9% in Q1
• Short-term car-sharing gross profit margin increased 10.5% year-on-year to 18.9%
• Socar Plan, the company's monthly subscription service, saw its gross profit margin improve to -8.1% from -15.3% in Q1
• Overall revenue decreased by 2% to KRW 101.7 billion (US$74.7 million) due to reduced used car sales

However, the company's pursuit of growth has come at a cost. 

Operating expenses increased by 33.4% year-on-year due to demand generation and platform expansion investments. 

This led to an operating loss of KRW 6.6 billion (US$4.9 million), compared to a profit of KRW 1.6 billion (US$1.2 million) in the same period last year.

Despite the current losses, Socar's management remains optimistic about the company's trajectory. 

CEO Park Jae-wook expressed confidence in achieving profitability from the third quarter onwards, citing the maturation of strategic investments and anticipated reductions in marketing expenses.

(US$1 = KRW 1,360.56)

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