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Posted : 2014-07-31 21:06
Updated : 2014-07-31 21:06

Overseas sales steer Naver to Q2 growth

By Yoon Sung-won

Naver, the nation's largest web portal, recorded 697.8 billion won ($680.6 million) in sales in the second quarter, up 22.2 percent year-on-year.

Its operating profit between April and June increased 38.5 percent to 191.2 billion won, compared to 138 billion won in the same period a year ago, according to the firm's regulatory filing released Thursday.

Naver attributed the sales growth to an improved performance in overseas markets.

On the back of the growing number of users of its instant mobile messenger application Line, the firm's overseas sales in the same period reached 216.5 billion won, 31 percent of its total quarterly revenue.

"This is the first time for us to record over 30 percent of our total sales from overseas markets," said Kim Sang-hun, CEO of Naver. "Naver has changed into a global company and we will continue to expand our services for the global market."

Its second-quarter net profit plunged 75.5 percent to 22.7 billion won in the same period, compared with 92.8 billion won from a year earlier. The firm explained this was largely due to the price fall of the company's own NHN Entertainment stocks. NHN Entertainment is a game development and publishing affiliate of Naver.

About 72 percent of Naver's second-quarter revenue was from advertising, while 24 percent came from content services including Line, cartoons and music streaming.

Naver's net profit in 2013 was 1.89 trillion won, double that of the previous year. Its revenue and operating profit rose 28.5 percent and 0.6 percent year-on-year, respectively, to 2.3 trillion won and 524.1 billion won.

Analysts said Naver is expected to grow further, especially in the global market.

"The company's major overseas markets, Japan and Indonesia, for example, still have relatively low smartphone distribution rates. Naver's global revenue from Line is also likely to grow as the rates increase," said Oh Dong-hwan, a market researcher at Samsung Securities, said. "In the same context, the performance of other content businesses such as mobile games will also improve."

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