Naver's 2022 net profit down 96 percent on one-off factor

Naver's headquarters in Seongnam, Gyeonggi [YONHAP]

Naver suffered a steep decline in net profit last year due to a one-off factor stemming from a business integration a year earlier.

The internet company's net profit reached 664 billion won ($544.1 million), down 96 percent from a year earlier, the company said in a regulatory filing Friday.

Operating profit 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, a 20.6 percent increase compared to the year before.

Naver said the on-year drop in net profit is attributable to a merger between its messaging firm Line 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 profit for the October-December period fell 4.2 percent on year to 336.5 billion won, and its net profit 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.

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 due to increased demand for online shopping.

Sales by the company's flagship search platform, which covers its ad business, grew 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 of Naver jumped 3.55 percent in the morning trade session, following the earnings announcement.

BY PARK EUN-JEE, YONHAP [park.eunjee@joongang.co.kr]