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[Alpha Biz=(Chicago) Reporter Kim Jisun] Kakao achieved record-high sales despite the worst crisis since its foundation last year. However, Kakao plans to focus on strengthening its internal stability this year as its operating profit has retreated and its annual net loss has also recorded 1.5 trillion won, turning into a deficit.
Its rival Naver has widened its gap with Kakao, hitting both sales and operating profit highs.
Kakao announced on the 15th that its consolidated sales rose 14.2% to KRW 8.1058 trillion last year, surpassing KRW 8 trillion for the first time, the highest ever. The company explained that Talkbiz sales drove earnings growth due to increased profitability in advertising and commerce (commerce) businesses amid KakaoTalk's evolution.
Kakao's content sales rose 20.2 percent to 4.1 trillion won, surpassing 8.8 percent in platform sales. In particular, the music sector jumped 92.9 percent to 1.725 trillion won on the back of the acquisition of SM Entertainment and increased sales of Melon. Talkbiz, a commerce business using KakaoTalk, increased by 11.2% to 2.109 trillion won.
Naver also saw its sales reach 9.67 trillion won last year, rising to 9 trillion won for the first time. In both Naver and Kakao, good performance in the content and commerce sectors led to increased sales.
Kakao's fourth-quarter sales rose 23 percent from the same period last year, breaking a quarterly high of 2.1711 trillion won and operating profit rising 108 percent to 189.2 billion won.
Considering the fact that founder Kim Bum-soo and other management suffered from judicial risks and internal feuds, including being investigated on charges of manipulating SM Entertainment's stock prices during the period, the company is said to have made a good defense.
However, last year's consolidated operating profit fell 10.9% year-on-year to 501.9 billion won. Due to investment in infrastructure and new businesses and increased fixed costs, the company also posted a net loss of about 1.5 trillion won per year, turning into a deficit.
On the other hand, Naver achieved the largest operating profit ever of 1.4888 trillion won, three times the operating profit of Kakao. The 'adjusted EBITDA (business profit before corporate tax, interest, and depreciation costs)', which shows the ability to generate cash, also increased 18.4% to 2.1338 trillion won.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
