Daum Kakao profit declines 20% in Q1
By Kim Yoo-chul
Daum Kakao posted 40.4 billion won in operating profit in the first quarter, down 20 percent from a year earlier, hit by the sluggish mobile gaming software business.
Its sales came in at 234.4 billion won, up 19 percent, it said Thursday. Net income was 30.8 billion won.
From a quarter earlier, operating profit fell 38.3 percent, net profit was down 40.4 percent and sales were down 7.7 percent.
“We’ve lost customers using Kakao gaming software. Daum Kakao will invest more throughout this year for corporate sustainability,” its co-CEO Choi Sae-hoon said in a conference call to investors and analysts.
Daum Kakao's mobile gaming business posted 58.8 billion won in operating profit, compared with 60.6 billion won a quarter earlier. This is the first time that the company saw a profit decline in its mobile gaming business.
Choi said its KakaoTalk mobile platform was still competitive in terms of the ability to generate cash.
“A new cab-calling service, KakaoTaxi, has received 1 million calls in 40 days since the service introduction. The taxi app will be upgraded," Choi said.
He said the app's market share in Seoul exceeded 50 percent as of March. Daum Kakao is also an operator of KakaoTalk, Korea's dominant mobile messenger.
“Also for the gaming business, we don't worry too much as our top priority is to maximize customer satisfaction. We eventually expect to achieve solid financial growth,” the CEO said.
The KakaoTalk operator also made clear that it plans to bolster its presence in the finTech industry, though that business is subject to changes of regulatory issues.
“FinTech is a very important infrastructure in mobile. We've created a taskforce to promote the mobile banking business,” Choi said.
The CEO said Daum Kakao intends to make an entry into a number of new services, including real-time video-sharing.
“The so-called Kakao TV will soon be launched, as we see more needs and products based on the real-time video-sharing. The Kakao TV will use other Kakao platforms. It will be exciting,” Choi Yong-seok, head of its investor relations team, said.