Naver, lower operating profit in the fourth quarter … Investment in technology / investment in new companies

Entry 2018.10.25 08:48
| Revision 2018.10.25 09:14

Won 1.3977 billion revenue for the third quarter of 2009, operating profit of 22.17 billion won
Decrease in operating profit due to investments in new technologies and new business
Main subsidiary, continued operating loss due to new business investment
R & D spending rose 23.9 percent to 358.6 billion won

Naver (NAVER (035420)) Continued investment in new technologies and new businesses, and lower operating profit for the fourth quarter. While Naver sales are steadily increasing, we are striving to continue investing to improve the competitiveness of existing businesses through technology acquisition and ecosystem enhancement.

Naver announced on November 25 to have recorded a business turnover of 1.3977 billion won in the third quarter of 2018, up 16.4% over the same period of the previous year. Operating profit for the period was established at 221.7 billion won, down 29% over the previous year, and net profit declined by 68.3% to 68.4 billion won, down 68.3% year-on-year.

Overall, operating expenses increased to W1,176 billion, up 32.3% from the same period last year. The cost of developing and operating the platform amounted to 193.1 billion won, up 21 percent from the previous year, while operating expenses of agencies and partners rose 18.1% to 254.7 billion won. Infrastructure operating expenses increased by 15.9 percent to 67.3 billion won and marketing expenditures by 17.5 percent to 82.3 billion won.

In addition, its subsidiary Line (LINE) recorded a € 54.6 billion operating loss related to blockchain development and marketing. The line is a loss of exploitation since 4Q07

Research and development costs for this year were 358.6 billion won, up 23.9 percent over the previous year. Quarterly research spending is steadily increasing as of the fourth quarter of 2017. In the third quarter of this year, research and development expenditures are the largest among quarterly research and development expenditures.

The sales and proportion of sales by business segment are as follows: △ advertising 136.1 billion won (10%) commercial platform (research advertising, etc.) 613 billion won (44%) platform computer form (Naverpei, etc.) 88.5 billion won (6%), Music, V live), 36.1 billion won (3%) and online platforms and other platforms (524 billion won, 37%).

Advertising increased by 2.5% over the same period last year due to the effects of the holiday season and the seasonal season, but decreased by 8.4% qoq. Sales of commercial platforms grew 11.5% year-on-year and 0.2% quarter-on-quarter due to slower growth due to Chuseok's impact, although demand for research and research products continued.

On the IT platform, Naver Pay sales increased and Cloud Works sales increased 51.1% and 3.3%, respectively, quarter-on-quarter. Content services grew 32.8% year-over-year and 13.7% quarter-over-quarter due to the growth of Webtoon and V-Live.

Other platforms, such as LINE and SNOW, continued to grow in key areas such as advertising, up 21.2% year-on-year and 7.8% q / q.

Han Sung-sook said: "The growth potential of existing businesses will decrease due to the economic recession and slowing mobile growth due to the slowdown in the growth rate of the national economy. competition between global operators is becoming more intense. " We will continue to challenge the foreign market based on our existing commercial capabilities and experience. "