SEOUL, Aug. 3 (Yonhap) — Kakao Corp., the operator of South Korea’s leading mobile messenger, reported on Thursday that its second quarter net profit had declined significantly due to increased costs and investments.
The company’s net profit for the April-June period came to 56.3 billion won (US$43.3 million), representing a 44% drop from the same period last year, according to a regulatory filing.
Its operating profit also fell 33.7% year-on-year to 113.5 billion won, while sales rose 12.1% to 2.04 trillion won.
The earnings were lower than the market expectations. According to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency, analysts had forecasted a net profit of 93.8 billion won.
Kakao’s content business, which includes its games, digital comics and music, accounted for 52% of the second-quarter sales, while the remainder was from its platform business. Content business sales rose 18% year-on-year to 1.05 trillion won, while platform business sales increased 6% to 988.7 billion won.
The company’s “story” business, which refers to entertainment content, saw a 1% year-on-year growth to 231 billion won. On the other hand, sales of its games decreased 20% to 268.6 billion won.
The number of monthly active users of KakaoTalk, its primary mobile messenger, reached 48.2 million as of the end of the second quarter, a 703,000 increase from a year ago.
Kakao said it will continue investing in infrastructure to provide a stable service, as well as in future growth engines such as artificial intelligence and health care services.
Kakao’s earnings report was released before the market opened.