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(3rd LD) Naver 2022 net profit down 96 pct on one-off factor

All News 15:51 February 03, 2023

(ATTN: ADDS stock price in 14th para)

SEOUL, Feb. 3 (Yonhap) -- South Korean internet portal giant Naver Corp. said Friday its net profit plunged in 2022 from a year earlier due to a one-off factor stemming from a business integration a year earlier.

Its net income reached 664 billion won (US$544.1 million), down 96 percent from 16.5 trillion won tallied a year earlier, the company said in a regulatory filing.

Operating income stood at 1.3 trillion won for all of 2022, down 1.6 percent from the year before. Sales came to 8.22 trillion won, representing a 20.6 percent increase compared with the year before, Naver said.

Naver said the on-year drop in net profit is attributable to a one-time income from a merger between its messaging firm Line Corp. in Japan and Z Holdings in the first quarter of 2021.

For the fourth quarter, Naver reported 2.27 trillion won in revenue, up 17.8 percent from a year ago.

Its operating income for the October-December period fell 4.2 percent on-year to 336.5 billion won and its net income slumped 59.1 percent on-year to 122.6 billion won.

The earnings fell short of market expectations. The average estimate of net profit by analysts stood at 253.7 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

This undated photo provided by Naver Corp. shows the company's headquarters. (PHOTO NOT FOR SALE) (Yonhap)

This undated photo provided by Naver Corp. shows the company's headquarters. (PHOTO NOT FOR SALE) (Yonhap)

Naver said brisk sales in the content and commerce sectors contributed to the rapid growth in its sales for 2022.

Content sales skyrocketed 91.3 percent to 1.3 trillion won over the one-year period due to increased global demand for its web content.

Revenue from Naver's commerce business in the first quarter jumped 21 percent on-year to 1.8 trillion won thanks to increased demand for online shopping.

The company's flagship search platform, which covers its ad business, saw its sales grow 7.9 percent on-year to 3.6 trillion won.

Sales from the fintech sector also expanded 21.2 percent on-year to 1.2 trillion won on increased online shopping through its mobile payment service Naver Pay.

Revenue from its cloud business gained 5.3 percent on-year to 402.9 billion won.

Shares in Naver jumped 5.67 percent to close at 223,500 won, sharply outperforming the broader KOSPI's 0.47 percent gain. The company's earnings report was released before the stock market opened.

Naver said it is planning to launch a new artificial intelligence search service, SearchGPT, named after the global sensation chatbot ChatGPT, in the first half of the year.

Recently launched by Open AI, ChatGPT is the center of attention across the world for its detailed responses and articulate answers powered by large amounts of data and computing techniques.

"Naver has the most quality search data in Korean language, and our AI model is one of the world's best," Naver CEO Choi Soo-yeon said in a conference call. "We are now working on improving our search capability and consumer experience."


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