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(LEAD) Kakao Q3 net profit down 84.2 pct to 137.2 bln won on base effect

All News 09:39 November 03, 2022

(ATTN: RECASTS throughout with details; CHANGES headline; ADDS image)

SEOUL, Nov. 3 (Yonhap) -- Kakao Corp. on Thursday reported a third-quarter net income of 137.2 billion won (US$96.8 million), down 84.2 percent from a year earlier due to a base effect.

The company said in a regulatory filing that it posted 150.3 billion won in operating profit for the quarter, compared with 168.2 billion won a year ago. Revenue rose 6.8 percent to 1.85 trillion won.

The earnings exceeded market expectations. The average estimate of net profit by analysts stood at 126.7 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The corporate logo of Kakao Corp. (PHOTO NOT FOR SALE) (Yonhap)

The corporate logo of Kakao Corp. (PHOTO NOT FOR SALE) (Yonhap)

The company said the on-year net profit decline is blamed on a base effect stemming from its merger of two U.S. web content publishing subsidiaries, Tapas Media and Radish Media Inc., last year.

Kakao said it logged 986.9 billion won in sales from its platform business, which includes its e-commerce platform Talk Biz, up 15 percent from a year ago.

Sales from the company's content business, including Kakao Games, digital comics and music, dropped 9 percent on-year to 871.8 billion won.

Its "story" business, which refers to entertainment content, saw a 6 percent on-year growth to 231.3 billion won, while sales of its games business tumbled 36 percent to 296.1 billion won.

The number of monthly active users of KakaoTalk, its flagship mobile messenger, came to 47.64 million as of end of the third quarter, up 830,000 from a year ago.

But Kakao said the third-quarter earnings did not include the cost and aftereffects of a massive service disruption last month caused by a fire at its data center on the southern outskirts of Seoul.

Due to the accident, nearly all online services provided from KakaoTalk, Kakao Pay and Kakao T, a transportation service app, suffered a massive malfunction.

Kakao said it is working on countermeasures and a compensation plan to handle the situation.

"To take full responsibility for the service that nearly all Korean people use, we will come up with effective measures to prevent recurrences and make appropriate compensation to the victims of the service failure," it said.

Shares of Kakao had fallen 4.49 percent to trade at 49,950 won on the main KOSPI as of 9:20 a.m.


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