Naver's Q1 net profit plunges 71.2 percent on year

Naver headquarters in Seongnam, Gyeonggi [NEWS1]

Naver's net profit for the first quarter plunged 71.2 percent on year spurred by the loss in accounting amid an economic slowdown, the internet portal operator announced Monday.

Its net income reached 43.7 billion won ($33 million) on a consolidated basis between January and March from 151.4 billion won during the same period of last year, the company said in a regulatory filing.

Operating profit stood at 330.5 billion won for the first quarter, up 9.5 percent from a year ago. Sales rose 23.6 percent on year to 2.28 trillion won from 1.85 trillion won.

The earnings fell short of market expectations. The average estimate of net profit by analysts stood at 224.2 billion won, according to a survey by Yonhap News Agency's financial data firm Yonhap Infomax.

The company blamed the sharp on-year decrease in net profit on an accounting loss from its investment in its affiliated company amid an economic slowdown and the weak won against the dollar.

Naver said brisk sales in the content and commerce sectors contributed to the on-year growth in its sales for the three months through March.

Content sales skyrocketed 94 percent to 411.3 billion won over the cited period due to increased global demand for the company's web content.

Revenue from Naver's commerce business in the first quarter jumped 45.5 percent on year to 605.9 billion won thanks to added sales from its new U.S. affiliate Poshmark.

The company's flagship search platform, which covers its ad business, saw its sales inch up 0.2 percent on year to 851.8 billion won.

Sales from the fintech sector also expanded 15.8 percent on year to 318.2 billion won on increased online shopping through its mobile payment service Naver Pay.

Revenue from its cloud business gained 1.2 percent on year to 93.2 billion won.

The earnings report was released before the stock market opened.

BY SOHN DONG-JOO, YONHAP [sohn.dongjoo@joongang.co.kr]