NHN, despite its highest sales, suffered a loss due to the ‘Timeef incident’… “Focus on game business next year” (comprehensive)

Operating loss of KRW 113.4 billion in the third quarter… deficit conversion
Sales reached KRW 608.3 billion, highest quarterly

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NHN recorded a loss of over 100 billion won in the third quarter of this year despite record-high sales. This is because one-time costs due to the Timef incident are reflected. The company plans to take a leap forward by focusing on its main business, games.

NHN announced on the 12th that it had a consolidated operating loss of 113.4 billion won in the third quarter of this year, turning into a loss compared to the same period last year. Sales amounted to KRW 608.3 billion, an increase of 6.4% compared to the same period last year.

Operating profit is affected by the reflection of one-time bad debt provisions for uncollected receivables due to the Timef incident. Excluding one-time bad debt expenses, operating profit in the third quarter was KRW 27.3 billion. Sales hit a quarterly high with even growth across all business groups, including games, payments/advertising, and technology.

NHN CEO Jung Woo-jin said in a conference call announcing earnings that day, “This loan loss charge is related to Timon and Happy Money Inc, which are in the process of rehabilitation. We will actively respond to the court’s demands in the future and continue recovery efforts in various ways.”

Looking at sales by sector, the gaming sector recorded KRW 112.5 billion, a 2.1% increase compared to the same period last year. Due to the strong performance of the 5th anniversary event of the launch of mobile ‘Hangame Poker Classic’ and the Chuseok holiday, overall web board game sales increased by 8.1% compared to the same period last year. In particular, the number of monthly new users for ‘Hangame Poker Classic’ more than doubled in the third quarter compared to the same period last year.

In the payment and advertising sector, NHN KCP‘s domestic and overseas affiliate transaction volume continued to grow, reaching KRW 292.6 billion, a 10.3% increase compared to the same period last year. In particular, NHN Payco’s corporate welfare solution business increased transaction amount by 31% in the third quarter compared to the same period last year.

The commerce division recorded KRW 61 billion, a 0.5% increase compared to the same period last year, thanks to NHN Commerce’s expansion of collaboration with new brands in its Chinese business.

The technology sector achieved KRW 102.7 billion, a 7.6% increase compared to the same period last year. NHN Cloud’s sales increased by 22.5% compared to the same period last year due to the reflection of sales from the cloud native consulting business, and NHN Duray also recorded a double-digit sales growth rate compared to the same period last year as sales in the public sector expanded.

The content sector recorded 50.5 billion won, a 1.0% increase compared to the same period last year. NHN Link’s sales increased by 33% compared to the same period last year, with sports and performance sales growing evenly.

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NHN plans to increase sales by focusing on the game business next year. CEO Jeong said, “There are two strategies for next year: diversifying and expanding the mid-core genre and global web board,” and added, “If we successfully settle in the market, we will be able to increase sales by 20-30%.”

He said, “The overall market size of web boards is limited to Korea,” and “We plan to secure global market share as stable profits will continue to be generated when web boards secure market share.”

NHN plans to simultaneously release mobile and PC versions of the new route shooter ‘Darkest Days’ in the second half of this year. Additionally, the final test will be held at ‘Steam Next Fest’ in February next year. In addition, the subculture genre’s ‘Stella Fantasy’ changed its game name to ‘Abyssdia’ and confirmed its release in the second quarter of next year. The company plans to achieve meaningful results in the game business by introducing a total of eight new games next year.

NHN Payco currently has an emergency management system in place and is accelerating business structure improvement and cost efficiency. NHN Payco plans to move its headquarters to NHN KCP’s Guro headquarters in the first quarter of next year to promote synergy with its subsidiary, NHN KCP. In addition, the plan is to focus the company’s capabilities on key businesses such as coupons and B2B business to improve profitability.

NHN Cloud is expected to achieve even better results in public-private cooperation projects in the future, including winning orders for the ‘government-wide service integration window cloud rental project’ last September and winning more than 60% of the total size in projects related to the Daegu Center of the National Information Resources Agency this year. .

In addition, NHN Duray plans to actively respond to financial demand based on the domestic SaaS industry’s first financial CSP stability evaluation, while leading the AI ​​collaboration tool market through the recently launched ‘Duray AI’.

NHN will pay dividends at the same level as previous years next year. The company plans to purchase additional treasury shares equivalent to 3% of the total number of issued shares and cancel all of the purchases within next year. After purchasing approximately 31.1 billion won worth of treasury shares so far this year, the company plans to purchase additional shares worth approximately 10 billion won starting today.

CEO Jeong said, “We will focus on profit-centered growth in all business sectors through continuous management efficiency across the group.”

Reporter Nahum Kang [email protected]

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