NHN Reports Strong Third Quarter Performance
NHN announced on the 9th that it recorded provisional sales of 571.5 billion won, operating profit of 23.4 billion won, and net profit of 79.9 billion won on a consolidated basis in the third quarter, indicating positive growth in both sales and operating profit compared to the same period last year.
Sales and Profit Growth
In comparison to the third quarter of 2022, NHN saw a 9.4% increase in sales and a remarkable 181.5% growth in operating profit. However, net profit experienced a decline of 62.7%.
Divisional Sales Analysis
While the gaming division experienced a slowdown in sales, the payment and advertising divisions saw notable growth in the third quarter.
- Game sector sales totaled 110.2 billion won, seeing a 4.9% decrease compared to the same period last year. This decline can be attributed to the inverse base effect resulting from the deregulation of web board games in 2022.
- On the other hand, the payment and advertising sector reported sales of 265.1 billion won, marking a 16.8% increase from the same period last year, driven by the growth of NHN Payco.
Future Growth Strategy
In its efforts to secure growth engines, NHN plans to launch 11 new titles covering casual, mid-core, and social casino games in the stationary gaming sector. Additionally, the company aims to focus on improving its structure and management for NHN Payco. NHN CEO Jung Woo-jin emphasized the need to strengthen the competitiveness of the game business and expand competitiveness in all business sectors to achieve significant growth in the future.
[비즈니스포스트] NHN’s third quarter sales and operating profit both increased.
NHN announced on the 9th that it calculated provisional sales of 571.5 billion won, operating profit of 23.4 billion won, and net profit of 79.9 billion won on a consolidated basis in the third quarter.
▲ NHN’s third quarter sales and operating profit both increased.
Compared to the third quarter of 2022, sales increased by 9.4% and operating profit increased by 181.5%. Net profit fell by 62.7%.
Looking at sales by business division, while sales in the gaming division slowed, growth in the payment and advertising divisions was notable.
110.2 billion was earned in game sector sales in the third quarter. There was a decrease of 4.9% compared to the same period last year.
Sales fell due to the inverse base effect resulting from the deregulation of web board games in 2022.
In mobile games, there were also titles with more sales. In mobile web board games, sales increased by 14% thanks to differentiated content such as ‘Regional Conquest Battle’.
The mobile game ‘Yo-Kai Watch Puni Puni’, served in Japan, achieved record sales thanks to the 10th anniversary event of the ‘Yo-Kai Watch’ IP (intellectual property) and the collaborative marketing effect with ‘Holo Live’ , third party IP.
The payment and advertising sector showed sales of KRW 265.1 billion, up 16.8% from the same period last year due to the growth of NHN Payco.
Thanks to efforts to improve profitability, NHN Payco’s accumulated operating loss through the third quarter decreased by 65% compared to the first quarter to the third quarter of 2022.
Payment app Payco continues to increase the share of ‘sales contribution transaction amount’ which includes point payments, coupons, and corporate wellness solutions among total transactions (KRW 2.6 trillion in the third quarter). The transaction amount of Payco’s sales contribution in the third quarter was 1.4 trillion won, an increase of 29% compared to the third quarter of 2022.
The trade division recorded sales of KRW 60.7 billion, down 8.4% from the same period last year due to continued uncertain external conditions and suspension of some services due to business reorganization. This figure fully reflects the performance of Iconic, an Italian luxury goods distributor acquired in July.
95.4 billion was gained from the sales of the technology sector in the third quarter. It increased by 33.8% compared to the same period last year. PDC and MSP businesses grew equally.
50 billion in content division sales were earned. There was a decrease of 1.9% compared to the same period last year. However, among the content divisions, ‘NHN Link’ showed the highest quarterly sales with equal growth in sports ticket sales and performance sales.
Starting from the fourth quarter, NHN decided to focus its efforts on securing growth engines in the stationary gaming sector. We are currently preparing a total of 11 new titles covering casual, mid-core and social casino.
In 2024, six new games will be launched, including the zombie apocalypse game ‘Darkest Days’. The company plans to launch ‘Uparu Odyssey’ globally, which has established itself in the domestic mobile gaming market, and launch the social casino game ‘Pebble City’ to the global market by placing on its own blockchain game platform ‘Pebble’ in the first half of 2024.
In 2025, ‘Project RE’ based on famous intellectual property will be launched domestically. Japan’s NHN Play Arts is preparing new works based on famous Japanese intellectual property, such as ‘Project G’ in 2024 and ‘Project BA’ in 2025.
Starting in the fourth quarter, NHN Payco decided to focus on improving its significant structure and management rather than expanding its total transactions.
We decided to achieve external growth and profit and loss improvement by focusing our capabilities on core services such as △point payment business focused on Payco point card △coupon business △B2B business such as corporate wellness solutions △Payco Campus.
NHN Cloud has been able to actively respond to the rapidly increasing demand for domestic AI infrastructure through the ‘Gwangju National AI Data Center’, which has been operational since October.
Moving forward, we decided to actively participate in the government’s ‘Cloud Native Conversion Project’ to lead the market and expand competitiveness in the private business sector, including Shinhan Investment & Securities’ ‘Meta Project’.
NHN CEO Jung Woo-jin said, “Despite difficult business conditions in the third quarter, we continued to see stable growth focused on our major businesses.” He added, “We will strengthen the competitiveness of the game business in the future to lay the foundation for long-term growth and expand our competitiveness in all business sectors, including payments, advertising, technology, and commerce.” “We will continue to achieve significant growth,” he said. Correspondent Cho Choong-hee
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