Innocean continued its performance improvement in the third quarter, supported by stable affiliate volumes.
According to the Financial Supervisory Service's electronic disclosure system on the 7th, Innocean recorded a gross profit of 211.5 billion KRW in the third quarter, a 10% increase compared to the same period last year. Gross profit, which is sales revenue minus cost of sales, is a key performance indicator in the advertising industry.
In the domestic (headquarters) market, it recorded 48.9 billion KRW, while the overseas market recorded 162.6 billion KRW. In the overseas market, the Americas region recorded 113.5 billion KRW, showing a double-digit growth rate of 14% year-on-year, followed by Europe with 24.9 billion KRW (15%) and emerging markets with 21.7 billion KRW (0.2%).
As gross profit increased, operating profit also rose. Operating profit reached 40.8 billion KRW, a 12.5% increase compared to the same period last year. This figure exceeded the operating profit estimate of 38.9 billion KRW made by more than three securities firms, and net profit increased by 27.7% to 43.2 billion KRW.
The campaign volumes for major advertisers such as Santa Fe FMC, Sorento, and Casper were instrumental in the performance improvement. Although selling and administrative expenses increased due to the acquisition of the media rep (D'Plan360) and reinforcement of overseas personnel, it is estimated that stable affiliate volumes and profitability improvement efforts through cost reduction had a positive impact.
In the third quarter, there was also a recovery in non-affiliate volumes. Campaigns were conducted for HiteJinro, SK Hynix, Hanwha, and the Ministry of Health and Welfare, and seven new advertisers were attracted domestically and eleven overseas.
The securities industry expects that Innocean's trend of increasing expenses will continue, but it will maintain stable performance based on affiliate volumes. Researcher Hwajung Lee of NH Investment & Securities explained, “Expenses may increase due to the acquisition of the media rep, establishment of the content JV (Studio Orbit), and additional corporations related to social advertising. However, in the mid to long term, it will show a differentiated image by leveraging its strengths in car marketing.”
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