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TMON, WeMakePrice scandal hits Kakao's operating profit

Published: 13 Feb. 2025, 09:53 Updated: 13 Feb. 2025, 17:00

LEE JAE-LIM
[email protected]

Kakao CEO Chung Shin-a speaks at the Kakao's press event held in central Seoul on Feb. 4. [YONHAP]

Kakao, the operator of the country's dominant mobile messenger KakaoTalk, said its fourth quarter profit dropped 33.7 due to the payout crisis involving e-commerce platforms TMON and WeMakePrice.

The company's operating profit fell from the previous year to 106.7 billion won in the September-December period, it said Thursday, coming below the analyst forecast of 118.4 billion won compiled by market tracker FnGuide. It also underperformed expectations on fourth quarter revenue, which fell two percent to 1.95 trillion won.

Net deficit totaled 276.9 billion won; the firm had logged a net loss of 1.91 trillion won the previous year. The company said the decline in quarterly net loss was led by a decrease in asset impairment losses from its content units acquired in previous years.

Kakao plans to introduce its new AI service, Kanana, and other related services later this year in collaboration with OpenAI.

“We are planning on running a public closed beta test for Kanana in the first half of this year,” Kakao CEO Chung Shin-a said on a conference call. “Following the CBT launch, we will be adding various features and functions on top of chatting interaction so that we can evolve this into hyper-personalized relationship based on group community AI services. Beginning with Kanana, we will actively launch various business-to-consumer AI services inside our ecosystem.”

Quarterly sales from the platform business unit rose 10 percent on year to 1 trillion won on higher revenue from its mobile messenger, KakaoTalk.

However, sales from the content business unit dropped 13 percent on year to 910.1 billion won on the sluggish performance of its gaming, music streaming and webtoon units.

For 2024, its net loss decreased to 43.6 billion won from a net deficit of 1.81 trillion won.

Its operating profit for the year rose 6.6 percent on year to 491.5 billion won, and annual sales increased 4.2 percent to 7.87 trillion won.

BY LEE JAE-LIM, YONHAP [[email protected]]