NHN's profit jumps on LINE growth
By Kim Yoo-chul
NHN, the operator of the nation’s dominant portal Naver, saw its net profit increase in the first quarter of this year, on the back of rapid growth of its messenger service LINE. It expects this robust performance to continue in the coming quarters.
The company posted a net profit of 157 billion won between January and March, up 16 percent from the previous year’s 136 billion won.
Quarterly revenue increased 17.6 percent year-on-year to 673 billion won during the quarter, and operating profit rose by 10.5 percent to 191 billion won in the cited period.
The solid performance was mainly attributed to the rapid rise in its free messaging application ― LINE.
“The number of registered users of our LINE messaging app is expected to surpass 300 million, globally. Our LINE business is expanding to countries in Southeast Asia, Spain and in South America. NHN will be aggressive in marketing for expansion,” NHN CEO Kim Sang-hun said, Thursday.
LINE has surpassed the 150 million mark in registered users, globally, so far, up from 100 million in January this year. The app launched back in the summer of 2011 in Asia, is already very popular in Japan and steadily expanding into the United States, Europe and Latin America.
“As much as 80 percent of the revenue from our LINE business comes from Japan. In terms of yen-denominated revenue, LINE grew by 90 percent during the first three months. But when we look at won-denominated revenue, the LINE business grew by 60 percent to 68.4 billion won year-on-year, due to the weakening yen,” said NHN Chief Financial Officer Hwang In-joon CFO during a conference call to analysts and investors.
“It’s too early to say that LINE is contributing much to our profit as we are still in the process of launching promotional campaigns. But we believe LINE will contribute more,” said the CFO.
The CFO said the weakening yen is the only factor that can possibly halt the growth of its LINE business.
“It seems that the LINE business is extending upside track, in general. Second quarter will be far better as the LINE app is increasingly being used in mobile games,” Hwang said during the call.
LINE also offers social networking services on its platform, focusing on the youngsters as its core market, with the introduction of games, stickers and kawaii mascots.
CEO Kim said the listing of its HanGame unit will be completed by the end of August this year, citing the approval granted by the Korea Exchange.
“This year will be very crucial for NHN. To respond to the changing market situations and to seek a better corporate future, NHN will become more agile to complete the business realignment as early as possible,” said the CEO.