Kakao posts record profit and exceeds expectations
Kakao’s net profit rose 117.5 percent year-on-year to 315.9 billion won ($ 276.4 million) in the second quarter, well above market expectations.
Analysts had expected net profit of 199.8 billion won, according to FnGuide.
Revenue hit a record 1.35 trillion won, up 41.9%, although the figure was in line with market expectations. Second-quarter operating profit jumped 66.3 percent year on year to 162.6 billion won, a quarterly record.
The good performance was largely driven by the IT company’s content business and the new business segment, which includes Kakao Mobility and Kakao Pay.
Kakao’s business is basically divided into two: platform business, which includes advertising sales of mobile services like KakaoTalk; and content, which includes revenue from games, webtoons and the music streaming service Melon.
Kakao’s platform revenue increased 47% year-on-year to 761.8 billion won. Its courier business posted a record quarterly revenue of 390.5 billion won, up 52% year-on-year on strong advertising sales.
Revenue from other segments of the platform business, including Kakao Mobility and Kakao Pay, increased 73% to 246.2 billion won. The number of Kakao Blue taxis reached 26,000, while Kakao Pay’s transaction volume totaled 24.5 trillion won in the second quarter alone.
“Kakao Mobility recently launched new parking, shuttle and airline related services,” Kakao CEO Yeo Min-soo said on a conference call Friday morning. “We plan to introduce new services such as car rental and shared electric scooter services in the second half of the year.”
Kakao’s content business revenue increased 35 percent year-on-year to 590.4 billion won in the second quarter. The content business has four main parts: games, music, stories and media, which includes the management and sale of original content.
Sales of the stories business, which includes webtoons, rose to 186.4 billion won, up 57% from a year earlier, thanks to sales of the Webtoon Piccoma platform of Kakao Japan and intellectual property revenues.
“Piccoma’s market share rose to 65% in the Japanese comic book app market in terms of sales in June,” said Bae Jae-hyun, executive vice president of Kakao.
The company’s music business recorded sales of 188.1 billion won, an 11 percent increase from the same quarter last year. Sales of the video game industry increased 20 percent year-on-year to 128.6 billion won.
Kakao closed at 145,500 won per share on Friday, down 2.35% from the close of the previous session. The combined market capitalization of Kakao, KakaoBank and Kakao Games on the local stock market now exceeds 100,000 billion won on Friday.
BY SARAH CHEA [[email protected]]