Socar Achieves First Q1 Profit, Third Consecutive Quarter in Black

Seoul, South Korea - Socar reported its first-ever first-quarter operating profit on Tuesday, marking its third consecutive profitable quarter as the company advances its profitability initiatives.

The company's quarterly revenue was KRW 131.5 billion (US$92.5 million) for the January-March period, representing a 45.2% increase from the previous year. 

It achieved an operating profit of KRW 1.4 billion (US$984,000), compared with a KRW 10.7 billion (US$7.5 million) operating loss in the same quarter last year.

According to Socar, the profit was achieved even though the first quarter traditionally was the lowest demand period in the mobility sector.

The company's used car business drove much of the growth, with revenue increasing to KRW 42.6 billion (US$30 million) from KRW 260 million (US$183,000) a year earlier, as Socar resumed selling vehicles it deemed had reached optimal timing for divestment under its vehicle lifecycle extension strategy.

"We have increased our average vehicle holding period by over 12 months compared to 2023," Socar said, explaining that this approach enables the company to generate profit even during typically slow business periods.

The car-sharing segment, which includes short-term rentals and the subscription service SocarPlan, recorded revenue of KRW 83.1 billion (US$58.4 million), a slight decrease of 0.9% year-on-year. 

Revenue in the platform business segment declined 9.8% to KRW 5.9 billion (US$4.1 million).

"Since the second half of last year, we've seen increased revenue and profit per vehicle due to our Socar 2.0 strategy," said Jaeuk Park, CEO of Socar. "We will continue our profit-oriented management to generate substantial earnings in the remaining quarters of this year."

Socar attributed its improved financial performance to three primary factors: growth in its SocarPlan subscription service, maximizing vehicle lifecycle value, and enhanced asset efficiency.

The SocarPlan service maintained approximately 4,000 vehicle contracts during the quarter and recorded a 93.9% increase in monthly average contracts compared to the previous year. 

The subscription service has posted a gross profit for three consecutive quarters.

The company's parking platform, "ModuParking," grew 20% year-on-year with Q1 revenue of KRW 2.3 billion (US$1.6 million), while its electric bicycle sharing service "Socar Elecle" recorded revenue of KRW 3.5 billion (US$2.5 million), down 17% from a year earlier due to operational restructuring.