Kakao Q1 net swells on gains from Dunamu stock disposal
Kakao Corp, the operator of South Korea's top mobile messenger Kakaotalk, said yesterday its first-quarter net profit jumped by more than fivefold from a year earlier, due to one-off gains from the disposal of its stocks in a local crypto exchange operator.
Net income reached 1.32 trillion won (US$1 billion) in the January-march period, compared with 239.8 billion won the previous year, the company said in a regulatory filing. Its fourth-quarter net profit in 2021 was 224 billion won.
Operating profit for the first quarter came to 158.7 billion won, a marginal growth from 157.5 billion won a year ago. Sales rose 31.3 per cent on-year to 1.65 trillion won.
Kakao attributed the surge in the net profit to a series of disposals of its shares in Dunamu, the operator of Upbit, South Korea's largest cryptocurrency exchange.
Kakao was one of the major investors of Dunamu in the early stage of its founding, with financing through various investment vehicles under different names, such as K Cube Venture Fund No. 1, in which Kakao once held a 43 per cent stake.
Kakao currently holds a 10.88 per cent stake in Dunamu, from a roughly more than 20 per cent stake it had owned together via its affiliated funds and other investment tools.
The earnings exceeded market expectations. The average estimate of net profit by analysts stood at 167.6 billion won, according to the survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
As for the first-quarter performance, solid growth in both of its main business pillars - platform and content - helped achieve the sound earnings.
It booked 886 billion won in sales from the platform business, which includes its e-commerce platform Talk Biz, up 27 per cent from a year ago.
Revenue from the content business, including Kakao Games, digital comics, music and others, also grew 36 per cent on-year to 765.7 billion won.
Its "story" business, which refers to entertainment content, saw a 38 per cent on-year sales jump to 240.5 billion won, on the back of the global K-drama hit "Business Proposal," a rom-com based on a Kakao webtoon, the company said.