Naver's net more than doubled in 2020

Naver’s net profit more than doubled in 2020, beating analyst expectations, as a result of people being forced to stay home and use computer devices due to the pandemic.

On Thursday, the company reported net profit of 836.2 billion won ($747 million) for the year, a 110.7-percent increase on year. Revenue was 5.3 trillion won, up 21.8 percent, while operating profit increased 5.2 percent to 1.2 trillion won.

This was the first time in four years that Naver’s operating profit surpassed one trillion won.

Fourth-quarter results were strong as well: 375.3 billion won in net profit, a 91.3-percent jump on year, and 1.5 trillion won in revenue, a 28.3-percent increase. Operating profit for the quarter was 323.8 billion won, up 17.6 percent on year.

The Korean IT firm’s performance beat analyst expectations of 696.7 billion won in net profit for 2020 and 200.9 billion won in net profit for the final quarter, according to data tracker FnGuide.

Naver benefited from the social distancing measures that obliged people to stay at home to avoid catching the coronavirus, spending more time using IT devices.

The company started out as a search engine more than two decades ago but now operates a wide array of IT services including e-commerce, fintech, cloud services and content platforms for webtoons and web novels.

Fifty-two percent of its 2020 revenue was generated from the search engine and advertising fees — an old cash cow. What was notable about the company’s performance during the pandemic was the greater growth in Naver's newer businesses.

While search engine revenues grew 5.6 percent on year, Naver’s commerce, fintech, content and cloud businesses all saw on-year revenue growth in the double digits and above 35 percent in 2020.

Naver CEO Han Seong-sook said in a Thursday conference call that Naver Webtoon users spent a total of 820 billion won on the cartoon service last year. Its number of monthly active users hit a new high of 72 million, she added.

The volume of transactions on Naver’s commerce platform, where small businesses can directly sell products to customers, jumped 76 percent on year. According to Han, more than 4,000 small-business owners saw monthly sales of 100 million won. In 2019, fewer than 2,000 had reached that milestone.

“With our technology connecting users at an isolated time, Naver saw remarkable growth in 2020 with small businesses and individual creators on our platform,” said Han. “We plan to continue investing 25 percent of our annual research and development budget in tools that can help small businesses and creators grow in the digital market.”

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]