Naver posts record-high operating profit of $347 million in April-June period

Naver announced an earnings surprise with double-digit growth, posting a record-high operating profit of 472.7 billion won ($347 million) during the April-June period, propelled by strong performances from core businesses.

Naver's headquarters in Seongnam, Gyeonggi [YONHAP]

Naver announced an earnings surprise with double-digit growth, posting a record-high operating profit of 472.7 billion won ($347 million) during the April-June period, propelled by strong performances from core businesses in search engines, commerce, fintech and cloud computing.

Naver CEO Choi Soo-yeon also said at the online conference on Friday that the company will likely remain the largest shareholder behind Line Yahoo (LY), the Tokyo-based operator behind Japan’s popular messenger app Line.

“As it became more evident that the Naver-LY incident resulted from the Japanese government’s administrative guidance concerning cybersecurity governance, we believe there will be no changes in major shareholders or business reduction in Line,” Choi said. “With the Japanese Ministry of Internal Affairs and Communication’s recent announcement, the security governance guidelines have been clarified and we will seek to strengthen our business collaboration based on that.”

Quarterly operating profit spiked at 26.8 percent on year, above the market consensus of 432 billion won compiled by market tracker FnGuide.

Revenue also posted a record-high 2.61 trillion won, up 8.4 percent on year but still below the market expectation of 2.64 trillion won.

Net profit jumped 15.8 percent on year to 332.1 billion won, exceeding the analyst forecast of 328.9 billion won.

By divisions, revenue from its search engines jumped 7.5 percent to 978.4 billion won.

In the commerce sector, revenue jumped 13.6 percent to 719 billion won.

Fintech surged 8.5 percent to 368.5 billion won.

The content business inched up 0.2 percent to 420 billion won.

The cloud business increased 19.2 percent to 124.6 billion won.

The portal giant also plans to roll out a new image-based search feed this year.

“We plan to conduct user interface improvement tests to attract new users and increase app traffic,” Choi said. “We will introduce a new exploration feed that enables quick navigation and trend checking based on images.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]