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Earnings

Kakao’s Q3 sales, operating profit soar on e-commerce, online ad gains

Nov 05, 2020 (Gmt+09:00)

South Korea’s mobile platform giant Kakao Corp. said Thursday its operating profit and sales jumped to their all-time highs in the third quarter thanks to strong growth in its online advertisement, e-commerce and other new business platforms.

Net profit for the July-September quarter more than tripled to 143.7 billion won ($127 million) from 51.4 billion won in the year-earlier period on a consolidated basis, according to the company’s Nov. 5 regulatory filing.

Revenue rose to a record 1.1 trillion won from 783 billion won, while operating profit also surged to a fresh high of 120.2 billion won from 59.1 billion won, extending its record-high operating income streak to the seventh straight quarter.

Kakao Corp.'s sales and profit rise to all-time highs

“The decent earnings are thanks to our pursuit of innovative ideas in delivering our products and services amid the unprecedented pandemic,” Yeo Min-soo, chief executive of Kakao Corp., said during a conference call with analysts on its quarterly results.

The company, which runs the country’s largest messaging app, Kakao Talk, attributed the third-quarter’s performance to robust traffic on its platforms as people chose to stay home and avoided face-to-face contact, leading to increased content use and online shopping.

GROWTH LED BY TALK BIZ

Revenue from Talk Biz, a business platform on its messaging app, climbed 75% on the year to 284.4 billion won.

Biz Board advertising evenue surged, with daily average pageviews hitting an all-time high in September. In the first nine months of this year, the number of advertisers on the platform reached 12,000, surpassing the company’s full-year target of 10,000, according to CEO Yeo.

Kakao Mobility

The company said transactions on its Kakao Commerce platform rose 68% in the third quarter, contributing to revenue growth for Talk Biz.

Revenue from paid content reached 148.4 billion won, up 61% from a year earlier, boosted by rising sales from its Japanese webtoon unit Piccoma. Sales of the Japanese unit more than tripled to 130 billion won in the third quarter from the year-earlier period.

Revenue from its new business sector, which includes Kakao Mobility and Kakao Pay, jumped 139% on-year to 148.8 billion won.

Game content revenue increased 52% to 150.4 billion won on the launch of new mobile game Guardian Tales.

Kakao Corp. said it will continue to diversify its business models in Korea and abroad to expand its revenue base.

Write to Min-Ki Koo at kook@hankyung.com

In-Soo Nam edited this article.

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