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(2nd LD) Kakao reports forecast-beating Q3 results

2017/11/09 16:30

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(ATTN: ADDS more details in paras 11-12, 15; UPDATES stock price in last para)

By Kim Han-joo

SEOUL, Nov. 9 (Yonhap) -- Kakao Corp., the operator of South Korea's top mobile messenger, KakaoTalk, reported a forecast-beating performance for the third quarter Thursday, apparently helped by robust revenues.

Operating income jumped 57 percent on-year to 47.4 billion won (US$42.5 million) in the July-September period, and sales also soared 32 percent to 515.4 billion won.

The company's third-quarter figures top previous records from second quarter of 2017.

The tally also beat the market consensus of 481 billion won in sales and 43 billion won in operating income, figures estimated by local brokerages in a poll by Yonhap Infomax, the financial news arm of Yonhap News Agency.

Kakao said its third-quarter revenue showed brisk performance for its advertising, games, content and commerce platforms.

Revenues from advertising jumped 19 percent on-year to 151.5 billion won on the back of steady growth by Plus Friend, Biz Message and emoticons.

Content revenue for third-quarter was 261.5 billion won, representing an increase of 32 percent over the year, the company said.

Black Desert Online continued to show strong performance overseas, and the launch of Onmyoji for Kakao led to a rise in game revenue.

Revenues from platform business came in at 102.4 billion won, up 55 percent on-year, thanks to sound the performance of various commercial services, such as its mobile payment platform, Kakao Pay.

Similar positive results also come from LOEN Entertainment Inc., a local music streaming and download service. The company currently owns 76.4 percent-share of LOEN.

Kakao said its revenues from music platforms for the third quarter came to 122.1 billion won, up 28 percent on-year, mainly thanks to LOEN which also logged record-breaking quarterly performance.

Kakao said it plans to incorporate its artificial intelligence (AI) into a wide variety of platforms in an effort to seek innovative business solutions.

"We don't think of AI as a trend but more of a basic technology and infrastructure," said CEO Rim Ji-hoon, noting that the company will further cooperate with partners to create various AI platforms and products.

The company's 15,000 units of its AI speaker, Kakao Mini, sold out in nine minutes on the day of its launch earlier this week.

Shares of Kakao closed at 152,500 won on the Seoul bourse, down 3.17 percent from a day earlier. The earnings were announced before the local market opened.