Kakao reports record quarter led by ads and new business

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Kakao reports record quarter led by ads and new business

Kakao’s net profit rose 200 percent on year in the first quarter to 239.9 billion won ($213 million), a record high for the quarter, far above expectations and a turnaround from a 195.5-billion-won net loss in the previous quarter.
Analysts were anticipating 140.8-billion-won in net profit, according to FnGuide.
Revenue hit a first quarter record of 1.26 trillion won, up 44.9 percent, though this figure was in line with market expectations. On quarter, revenue was up 2 percent, with drops reported in games and music.  
On-year growth was led by Kakao Talk, Kakao T and Kakao Pay.
Ad revenue on the messaging service was 361.5 billion won, up 61 percent on year, while new business segment revenue, which includes Kakao T and Kakao Pay, rose 89 percent to 189.8 billion won.
Transactions made on the payment service came in at 22.8 trillion won, climbing 58 percent.
Growth in other areas was markedly slower.
Sales from Daum, a portal site run by Kakao, totaled 117.5 billion, edging up 1 percent over a year ago.  Revenue of Kakao’s content business, which includes music, webtoons and gaming services sales, totaled 589.2 billion won, up 38 percent on year.  
The content business is run by Kakao Entertainment, a 63.50-percent-owned subsidiary that may be taken public in the United States. As the messenger market is crowded, Kakao is looking toward content for growth.
Kakao CEO Yeo Min-soo said that the company is aiming to have a double-digit percent of its sales overseas this year.
“Boosting a presence overseas via increased investment is our top priority instead of maximizing profit,” Yeo said, “We are planning on aggressive marketing for the global markets and investment in the content business,” the CEO said in a conference call on Thursday.  
Kakao’s shares fell 0.43 percent to close at 115,000 won on Thursday.
BY PARK EUN-JEE [park.eunjee@joongang.co.kr]
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