Turned to Deficit Due to Timep Incident, but Annual Sales Hit Record High
Six New Game Titles to Be Released This Year
"Accelerating Profitability Through Core Competitiveness and Structural Efficiency"
NHN posted a loss last year due to the aftermath of the delayed settlement incident involving Qoo10-affiliated e-commerce platforms such as Tmon and Wemakeprice (Timep). During the same period, sales grew compared to the previous year, achieving an all-time high on an annual basis.
According to the IT industry on the 14th, NHN announced yesterday that it recorded an annual operating loss of 32.6 billion KRW on a consolidated basis last year, turning to a deficit compared to the previous year. However, annual sales reached a record high of 2.4561 trillion KRW, an 8.2% increase from the previous year.
Looking at the performance on a quarterly basis, consolidated sales in the fourth quarter of last year increased by 7.6% year-on-year to 643.9 billion KRW, setting a new quarterly sales record. Operating profit in the fourth quarter turned positive to 25 billion KRW compared to the same period last year.
NHN’s loss last year was due to the Timep incident. The problem arose because prepaid electronic payment means called 'Tmon Cash,' sold by Tmon at the time, could be converted into Payco Points. When the incident occurred, refund requests for Payco Points converted from Tmon Cash flooded in, but Tmon failed to pay Payco. The uncollected accounts receivable resulting from this were reflected as bad debt expenses, increasing the scale of operating losses. The total amount of uncollected receivables caused by Timep and Happy Money gift certificate operator Happy Money INC reached approximately 130 billion KRW.
Excluding one-time costs related to Timep, NHN explained that annual operating profit increased by 94% year-on-year to 108.1 billion KRW, marking an all-time high.
Examining fourth-quarter sales by segment, the gaming division recorded 119 billion KRW, up 6.5% year-on-year, thanks to strong performances from major web board games and Japanese mobile games. In particular, sales of web board games increased by more than 13% compared to the same period last year. 'Hangame Double A Poker' saw its sales more than double compared to the same period last year, thanks to the hosting of the 'Bithumb-Double A Poker Championship.'
Sales in the payment and advertising division for the fourth quarter increased by 4.8% year-on-year to 307 billion KRW. This was due to growth in NHN Payco’s business-to-business (B2B) operations and an increase in overseas merchant transaction amounts at NHN KCP. The transaction amount for the core B2B corporate welfare solution business in the fourth quarter rose 44% compared to the same period last year.
Sales in the technology division increased by 50.2% year-on-year, reaching a quarterly record high of 118.5 billion KRW. NHN Cloud achieved results in the public cloud transition project, while NHN Doorey and NHN Techorus also recorded double-digit sales growth rates.
Sales in the commerce division decreased by 16.6% year-on-year due to management efficiency improvements. The content division recorded 51.8 billion KRW, up 4.0% year-on-year, thanks to the year-end performance business of NHN Link.
NHN plans to focus on generating results in the gaming business this year while improving profitability through structural efficiency in major business divisions. In the gaming business, NHN plans to release a total of six new titles this year, including Darkest Days, Abyssdia, Pebble, Pebble City, and Project STAR.
NHN Payco will concentrate its capabilities on core businesses such as points, coupons, and corporate welfare solutions, and will gradually discontinue some low-profit services. After relocating to the Guro building where NHN KCP is located in February, it plans to expand synergy among payment business affiliates.
NHN Cloud plans to expand its GPU-as-a-Service (GPUaaS) business based on the Gwangju Artificial Intelligence (AI) Data Center and actively respond to government AI-related projects.
Jung Woo-jin, CEO of NHN, said, "Although the Timep incident was a key variable in the management environment last year, excluding its impact, we recorded the highest annual operating profit, showing that our efforts to improve profitability have yielded tangible results. This year, we will focus on strengthening the competitiveness of major business divisions, achieve better-than-expected results in the gaming business, and firmly establish our presence in the cloud business, which is expected to grow steadily in line with AI trends."
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