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Naver’s Q3 operating profit falls 29% on losses from Line messenger, tech investment

South Korean internet giant Naver said Thursday its operating profit fell 29 percent on-year in the third quarter due to losses from its Japan-based mobile messaging unit Line and increased tech investment costs.

The firm posted an operating profit of 221.7 billion won ($195 million) in the July-September period, down 29 percent from the same three months of last year.

Third-quarter revenue came to 1.39 trillion won, up 16.4 percent on-year, while net profit fell 68.3 percent on-year to 68.4 billion won, according to Naver.

Naver's headquarters in Pangyo, Gyeonggi Province (Yonhap)
Naver's headquarters in Pangyo, Gyeonggi Province (Yonhap)

By category, advertisement revenue came in at 136.1 billion won, up 2.5 percent on-year. Revenue from the business platform segment increased 11.5 percent on-year to 613 billion won on increased profitability from mobile and shopping search ads.

IT platform revenue jumped 51.1 percent on-year to 88.5 billion won on the back of robust growth from mobile payment platform Naver Pay and its cloud business.

Revenue from Naver’s content services rose 32.8 percent on-year to 36.1 billion won, riding the growth of the Naver Webtoon platform and livestreaming app V.

Meanwhile, revenue from Naver’s Japan-based mobile messaging unit Line came in at 524 billion won, up 21.2 percent on-year, according to the company’s earnings report.

“With a general economic slowdown and sluggish growth of the mobile market, the growth possibilities of our existing businesses are decreasing. Meanwhile, global competition is intensifying,” Naver CEO Han Seong-sook said in a statement.

“Naver will focus on new technology acquisition and service improvement, and create a business environment for shared growth with our partners. Based on our existing strength, we will continue to target overseas markets to secure global competitiveness.”

By Sohn Ji-young (jys@heraldcorp.com)

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