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SEOUL, Aug. 4 (Yonhap) — South Korean internet portal giant Naver Corp. said Friday its second-quarter operating profit and revenue reached quarterly highs, driven by the strong performance of its commerce and content businesses.
Its net profit rose more than 80 percent year-on-year to 286.7 billion won (US$220.7 million), up 80.9 percent from a year earlier, the company said in a regulatory filing.
Operating profit for the April-June period rose 10.9 percent from a year ago to 372.7 billion won. Sales increased 17.7 percent to 2.4 trillion won over the cited period.
The earnings exceeded market expectations. The average estimate of net profit by analysts stood at 272.7 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
The tech giant also attributed its better-than-expected performance to companywide cost reduction efforts, improved profitability of its Webtoon service, and higher profitability of Poshmark, a U.S. social commerce marketplace for fashion that it acquired early this year.
“We have managed to expand most of our major business sectors in the second quarter,” Naver CEO Choi Soo-yeon said on an earnings call, adding the company’s efforts to enhance profitability and reduce unnecessary costs have also paid off.
Revenue from Naver’s commerce business in the second quarter increased 44 percent year-on-year to 632.9 billion won thanks to brisk sales from Brandstore, Travel and Kream, the company said.
Content sales jumped 40.1 percent to 420.4 billion won over the cited period due to increased global demand for its webtoons and Snow. Naver said paid users for its content rose more than 20 percent in Japan and the United States.
The company’s flagship search platform, which covers its ad business, saw its sales increase 0.5 percent year-on-year to 910.4 billion won.
Sales from the fintech sector also rose 14.9 percent year-on-year to 339.7 billion won on increased online shopping through Naver Pay, its mobile payment service, and continued expansion of its loan service portfolio. Since Naver Pay integrated with Samsung Pay in March, the volume of offline payment transactions more than doubled from the period a year-ago, the company said.
Revenue from its cloud business declined 0.4 percent year-on-year to 104.5 billion won.
Naver said its next-gen artificial intelligence (AI), HyperClova X, and chat-based AI service, Clova X, to be launched on Aug. 24, are expected to boost its bottom line in the second half.
Naver started to hire skilled workers specialized in AI in 2017 and has so far invested more than 1 trillion won in the sector.
The earnings report was released before the stock market opened.