Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Tmoney suffers snowballing losses in Mongolia
A Mongolian passenger pays the bus fare in Ulaanbaatar using U-money, the public transportation payment system Tmoney exported to the country, in this file photo. / Courtesy of Ulaanbaatar Smart Card
By Park Jae-hyuk
By Park Jae-hyuk
Tmoney is facing mounting losses from its business in Mongolia which it began ambitiously in 2015, the public transportation payment service provider's regulatory filing showed Friday.
Ulaanbaatar Smart Card, the Mongolian subsidiary of Tmoney, suffered a 1.79 billion won ($1.4 million) loss in 2019, following a 1.82 billion won loss the previous year. Its accumulated loss over the past five years reached 9.2 billion won.
Tmoney transplanted Seoul's public transportation payment system to Mongolia, a year after it declared the “Vision 2020” plan in 2014 to overcome difficulties from the saturated domestic market. Back then, the company expected to make a 100 billion won profit from Mongolia over the following 10 years.
The landlocked East Asian country, however, underwent a three-year bailout program from the International Monetary Fund (IMF) in 2017, due to an economic slump after a sharp decline in prices of raw materials the country exports.
In the aftermath of the IMF's bailout plan, Mongolia faced a rapid depreciation of its currency, which resulted in Ulaanbaatar Smart Card's continuous losses.
Tmoney has lost all its initial investment in its Mongolian subsidiary.
In 2016, its Mongolian subsidiary fell into a state of capital impairment. Its debt was 7.1 billion won larger than its assets as of 2019.
What is worse, performances of Tmoney's other subsidiaries established for its foreign businesses have remained sluggish.
In 2017, the company liquidated Tmoney America that it set up in 2014 to provide call taxi services in New York and New Jersey.
Tmoney Asia, its Malaysian subsidiary, is also suffering from capital impairment, as its debt was 1 billion won larger than its assets last year. SMDev, its foreign business consulting arm, posted a 115 million won loss in 2019.
The Korea Times tried several times to reach Tmoney to ask about its countermeasures against the sluggish earnings overseas, but the company did not answer.
Founded in 2003, the company changed its name in 2019 from Korea Smart Card to Tmoney.
Its largest shareholder is the Seoul Metropolitan Government holding a 36.16 percent stake. The second-largest is LG CNS which holds a 32.91 percent stake.
Tmoney CEO Kim Tae-geuk, who has led the company since 2018, previously worked at LG CNS.