Kakao reports poor Q1 performance

By Park Sae-jin Posted : May 10, 2018, 10:15 Updated : May 10, 2018, 10:34

[Courtesy of Kakao]



SEOUL -- Kakao Corp., South Korea's top smartphone messaging app operator, posted a 73.1 percent drop in its net profit in the first quarter of this year due to high costs caused by raised personnel expenses and an active advertising campaign for its new businesses.

The operator of KakaoTalk said in a consolidated earnings report that its first-quarter net profit fell to 14.6 billion won (13.5 million US dollars) from 54.4 billion won a year earlier. Sales were up 25.2 percent on-year to a record high of 555.4 billion won but operating profit fell 73 percent to 10.4 billion won.

Kakao attributed the fall in profit to a hike in labor and marketing costs as well as increased operating costs in its new mobile payment system Kakao Pay and other new businesses. The company was optimistic about its future, saying it will introduce new services related to smart cars, smart homes and internet of things (IoT) devices. It predicted further growth in advertising and web contents.
 
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