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(3rd D) Kakao's Q3 net surges 6 times higher on sound content, ad businesses

All News 14:08 November 07, 2019

(ATTN: ADDS more details in paras 5, 10-11)
By Kim Han-joo

SEOUL, Nov. 7 (Yonhap) -- Kakao Corp., the operator of South Korea's top mobile messenger KakaoTalk, said Thursday its third-quarter net profit skyrocketed nearly six times higher from a year earlier on the back of robust revenue from its content and ad businesses.

Net profit reached 51.1 billion won (US$44 million) in the July-September period on a consolidated basis, compared with 7.4 billion won a year earlier, the company said in a regulatory filing.

Sales jumped by 31 percent on-year to reach a quarterly record of 783.2 billion won over the cited period, and its operating income also jumped 93 percent on-year to a quarterly record of 27.7 billion won, it said.

Kakao said its third-quarter revenue showed brisk performance in both its platform and content businesses.

"In short, we showed healthy growth," Yeo Min-soo, co-CEO of Kakao, said in a conference call. "Revenue growth in ads was very strong, coupled with solid growth in overall businesses, including e-commerce, games, music and other content."

Kakao said the revenue from its platform business surged by 39 percent on-year to 350.7 billion won during the cited period on the back of steady growth of Biz Message and increased revenues from new businesses, such as Kakao Mobility and Kakao Pay.

Revenue from the content business also expanded by 25 percent on-year to 432.4 billion won in the third quarter mainly due to steady revenue from the country's top music streaming service, Melon, under its arm.

An image of the corporate logo of Kakao Corp. provided by the company (PHOTO NOT FOR SALE) (Yonhap)

An image of the corporate logo of Kakao Corp. provided by the company (PHOTO NOT FOR SALE) (Yonhap)

Revenue from its new businesses, such as Kakao Mobility and Kakao Pay, also more than doubled to 62.3 billion won during the cited period, officials said.

Kakao attributed it to an increased number of offline stores adopting its one-click payment system and more members joining its chauffeur service, Kakao Driver, under Kakao Mobility.

Kakao also said it will continue to beef up its platform businesses that are based on Kakao Talk, including Talk Board. Individual sellers can sell their products through a platform that is connected to Kakao Talk.

"We plan to achieve a combined sales of over 1 trillion won through Talk Biz next year," Yeo said.

In the content business, Kakao said it will continue to make inroads into overseas markets, including launching music streaming services all over Asia in the near future.

Kakao rolled out the service in Japan and Indonesia earlier this year.

Shares of Kakao were trading at 153,500 won as of 9:05 a.m. on the Seoul bourse, up 1.66 percent from a day earlier. The earnings were announced before the local market opened.


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