[비즈한국] HappyNarae, an MRO (Maintenance, Repair, and Operations) company under SK Group and a social enterprise affiliated with SK Hynix, has begun liquidating its overseas subsidiaries. Attention is focused on the background of the decision to liquidate these two entities just four years after expanding its overseas procurement business by establishing subsidiaries in the United States and Hungary in 2021.
On May 28 of last year, HappyNarae's board of directors passed the "Approval for Liquidation of Investment Subsidiaries in the US and Hungary" as originally proposed. According to disclosures from its parent company, SK Hynix, it was confirmed that the Hungarian subsidiary (HappyNarae Hungary) began liquidation procedures in the fourth quarter of last year, while the US subsidiary (HappyNarae America) began in the first quarter of this year.
This move is interpreted as an effort to streamline its business structure by disposing of overseas subsidiaries that have incurred losses for several years and refocusing on its headquarters and Chinese operations. An SK Hynix official explained, "We are proceeding with the liquidation of some subsidiaries to improve the efficiency and business viability of our overseas operations."
Generating Billions in Revenue but Facing Net Losses… Poor Profitability
HappyNarae is an MRO company founded in 2000 as a joint venture between SK Networks and the US-based W.W. Grainger. MRO refers to the business of procuring and supplying consumable materials and parts necessary for corporate operations. The company changed its name from MRO Korea to its current name, HappyNarae, when it converted into a social enterprise in 2013, and SK Hynix has been its largest shareholder since 2018. Its primary business is procurement outsourcing, supplying consumable materials and parts to various companies, including SK affiliates, in key industries such as semiconductors, IT, and construction. The profits generated from these activities are used to prioritize purchases of products from other social enterprises and to support their market access.
The local subsidiaries established in 2021 in Georgia (USA) and Budapest (Hungary) were responsible for the distribution of local industrial materials. The scale of the business was not insignificant; in 2023, the Hungarian subsidiary recorded 53.9 billion won in revenue, and the US subsidiary recorded 78 billion won, totaling over 130 billion won.
However, profitability remained poor. The combined net loss of the two subsidiaries grew from approximately 800 million won in 2023 to about 2 billion won in 2024. Following the liquidation decision, the scale of the business shrank rapidly. Last year’s revenue dropped to 6 billion won for the Hungarian subsidiary and 15.4 billion won for the US subsidiary, a decline of 85% and 80%, respectively, from the previous year. Assets also plummeted, with the Hungarian subsidiary’s assets shrinking from 6.7 billion won to 200 million won, and the US subsidiary’s from 16.9 billion won to 300 million won.
Impairment Losses of Two Subsidiaries Reflected as Losses at Headquarters
The costs associated with the liquidation were reflected in the headquarters' financial performance. Last year, HappyNarae recognized impairment losses of 5.6 billion won in total on its investments in the two subsidiaries, including approximately 2.3 billion won for Hungary and 3.3 billion won for the US. An impairment loss is recognized when the recoverable amount of an asset falls below its book value. Although HappyNarae made an additional capital contribution of 293 million won to the US subsidiary last year, the investment book value for both subsidiaries became 0 won by the end of the year. During the liquidation process of the US subsidiary, an additional 2.8 billion won in impairment losses related to trade receivables and accounts receivable was also recorded.
HappyNarae's revenue last year was 889.7 billion won, similar to the previous year (896.1 billion won). Operating profit fell from 6 billion won to 4.3 billion won, and the company shifted from a net profit of 3.6 billion won to an 8 billion won loss. The scale of the liquidation-related impairment losses is similar to the scale of the net loss.
Regarding the impact on performance, the company stated, "Some impairment losses, etc., were reflected in the 2025 earnings. It is difficult to confirm the specific impact ratio."
Since the book values of the two subsidiaries have already been written down to 0 won, the burden of additional losses is expected to be minimal. HappyNarae has continued its social value projects domestically until recently. At the "Korea Social Value Festa" held at COEX in Seoul on the 21st and 22nd, HappyNarae operated the "Happy Alliance 10th Anniversary Exhibition" and the "SK Impact Booster Day."
Currently, the company has overseas subsidiaries in three countries: China, Hungary, and the US. Once the liquidation is completed, only the Chinese subsidiary will remain as an overseas subsidiary of HappyNarae.