NHN reports 21.4 billion won in net profit for third quarter

NHN reported 21.4 billion won ($15.4 million) in net profit for the third quarter of 2022, beating analyst expectations but down by 51.9 percent compared to the same period last year. The company’s July-to-September operating profit also dipped ...

NHN logo [NHN]

NHN reported 21.4 billion won ($15.4 million) in net profit for the third quarter of 2022, beating analyst expectations but down by 51.9 percent compared to the same period last year.

The company’s July-to-September operating profit also dipped 70.3 percent compared to the same period a year prior, coming in below the 18.1-billion-won market consensus at 8.3 billion won. Net profit came in higher than operating profit due to the weakening won.

Revenue was 522.4 billion won, 10.6 percent higher than the third quarter last year but slightly short of the market forecast of 533.4 billion won.

NHN, best known as a game publisher and the operator of payment service Payco, explained that high marketing costs for its games were the main factor of its weak profit.

“We saw a significant increase in advertising costs compared to the previous year,” said Chief Financial Officer Ahn Hyun-shik during a conference call on Tuesday morning. “Marketing costs will be greatly reduced next year, and we plan to execute related costs more efficiently.”

In order to weather the worsening market conditions, NHN will reduce the number of its subsidiaries from around 90 this year to 60 by the end of 2024, its CEO Chung U-jin said.

NHN has been consolidating its companies since earlier this year, such as by “absorbing” its wholly-owned subsidiary last October.

NHN was founded in 1998 as Hangame Communication. It merged with Naver in 2000, and the new company changed its name to NHN. The two companies split in 2013 as Naver and NHN Entertainment, and NHN Entertainment again changed its name to NHN in 2019.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]