The Korea Herald


Kakao 2022 net down 38% due to base effect

By Yonhap

Published : Feb. 10, 2023 - 09:26

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The corporate logo of Kakao Corp. (Kakao Corp.) The corporate logo of Kakao Corp. (Kakao Corp.)

Kakao Corp., the operator of the country's top mobile messenger, said Friday its 2022 net income fell 38 percent due to a base effect.

The company's net profit totaled 1.02 trillion won ($810.2 million) on a consolidated basis in 2022, compared with a profit of 1.64 trillion won a year ago, according to Kakao in a regulatory filing.

It posted 580.5 billion won in operating profit for the year, down 2.4 percent from 594.9 billion won the previous year. Annual sales rose 15.8 percent to 7.1 trillion won from 6.1 trillion won.

Kakao said the weak bottom line is blamed on losses stemming from its merger of two US web content publishing subsidiaries, Tapas Media and Radish Media Inc., two years ago.

For the fourth quarter, Kakao posted a net loss of 539.3 billion won, turning from a profit of 224.1 billion won a year earlier, due to the accounting loss from the Tapas-Radish merger.

It posted 100.4 billion won in operating profit for the quarter, down 5.8 percent from a year ago, while sales fell 0.6 percent to 1.8 trillion won.

The quarterly loss was 820.5 percent higher than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

Kakao said it logged 3.8 trillion won in sales from its platform business last year, which includes its e-commerce platform Talk Biz, up 16 percent from a year ago.

Sales from the company's content business, including Kakao Games, digital comics and music, rose 15 percent on-year to 3.3 billion won.

Its "story" business, which refers to entertainment content, saw a 16 percent on-year growth to 920.9 billion won, while sales of its games business jumped 11 percent to 1.1 trillion won.

The number of monthly active users of KakaoTalk, its flagship mobile messenger, came to 47.77 million as of end of the fourth quarter, up 740,000 from a year ago.

Kakao said the cost and aftereffects of a massive service disruption in mid-October, caused by a fire at its data center on the southern outskirts of Seoul, was included in the company's fourth-quarter earnings, worth 40 billion won.

Due to the accident, nearly all online services provided from KakaoTalk, Kakao Pay and Kakao T, a transportation service app, suffered a massive malfunction for about a week.

In December, Kakao announced plans to give cash compensation to all small business owners for damage from the service disruption. Those who reported losses of 300,000 won or less will receive 30,000 won in compensation, while businesses with 300,000-500,000 won in damage will be granted 50,000 won.

Kakao's earnings report was released before the market opened. (Yonhap)