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(LEAD) Kakao Q1 net profit down 93.4 pct due to base effect

Economy 09:11 May 04, 2023

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SEOUL, May 4 (Yonhap) -- Kakao Corp., the operator of South Korea's top mobile messenger, said Thursday its first-quarter net income plunged 93.4 percent from a year earlier due to a base effect.

The company's net profit totaled 87.1 billion won (US$65.1 million) on a consolidated basis in the January-March period, compared with a profit of 1.3 trillion won a year ago, according to Kakao in a regulatory filing.

It posted 71.1 billion won in operating profit for the quarter, down 55.2 percent from 158.7 billion won the previous year. Annual sales rose 5.4 percent to 1.74 trillion won.

The earnings for the three months through March fell short of market expectations. The average estimate of net profit by analysts stood at 97.7 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

Kakao said the weak bottom line is blamed on one-off earnings from a stock sale in the first quarter of last year.

This image provided by Kakao Corp. shows its corporate logo. (PHOTO NOT FOR SALE) (Yonhap)

This image provided by Kakao Corp. shows its corporate logo. (PHOTO NOT FOR SALE) (Yonhap)

Kakao said it logged 964.7 billion won in sales from its platform business in the first quarter, which includes its e-commerce platform Talk Biz, up 9 percent from a year ago.

Sales from the company's content business, including Kakao Games, digital comics and music, inched up 1 percent on-year to 775.6 billion won.

Its "story" business, which refers to entertainment content, posted a 5 percent on-year decline to 228.6 billion won, while sales of its games business climbed 1 percent to 247.3 billion won.

The number of monthly active users of KakaoTalk, its flagship mobile messenger, came to 48.03 million as of the end of the first quarter, up 600,000 from a year ago.

Its operating costs climbed 12 percent on-year to 1.7 trillion won due to increased investment in data center facilities.

Kakao said it will sustain its growth momentum by strengthening its original functions and services and diversifying its business portfolio through business cooperation with SM Entertainment, which the tech giant acquired earlier this year.

Kakao's earnings report was released before the market opened.


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