Kakao achieves record Q3 sales on robust content business, OP down 7%

[Photo by Yonhap]

South Korean platform giant Kakao Corp. posted record third-quarter sales despite the legal matters surrounding the company.

Kakao said in a regulatory filing on Thursday that it posted 140.3 billion won ($169 million) in operating profit for the third quarter, down 6.7 percent from the same period a year ago. Net profit plunged 63.9 percent to 49.5 billion won.

Sales, however, were up 16.3 percent to reach a quarterly high of 2.16 trillion won.

Content sales were 1.13 trillion won, up 29.8 percent from the third quarter last year.

In particular, sales from music reached 513.3 billion won, up 105 percent from a year ago. Media sales were up 13.6 percent to 107 billion won and KakaoStory sales 7.7 percent to 249.1 billion won.

Sales from its games business, however, dipped 11.5 percent to 262 billion won.

Platform sales rose 4.3 percent to 1.03 trillion won while portal business sales declined 24.2 percent to 83.2 billion won.

Operating expenses rose 18.3 percent to 2.21 trillion won during the cited period.

“The earnings were above the market consensus, unlike the expectations that operating income would decline due to investments in artificial intelligence (AI) and internet data centers (IDCs),” the company said. “We plan to continue our management focus on the basics, such as solidifying our business structure to ensure sustainable growth and investing relentlessly to provide a stable supply of convenient and safe services to our users.”

Over the past two years, Kakao paid 49.2 billion won in dividends and retired 422.4 billion won in treasury stocks, or 1.4 percent of its outstanding shares.

The company plans to announce a policy for increased mid- to long-term shareholder returns next year, it said.