NHN Achieves Record High Performance Despite Game Business Slump... Operating Profit Surpasses 100 Billion Won (Comprehensive)

[Asia Economy Reporter Kang Nahum] NHN achieved its highest-ever performance, driven by strong results in its payment and advertising businesses, including the simple payment service 'Payco,' despite sluggishness in its gaming business.

NHN announced on the 8th that its consolidated operating profit for last year was tentatively estimated at 102.5 billion KRW, an 18.2% increase compared to the previous year.

Revenue rose 13.0% year-on-year to 1.6814 trillion KRW, and net profit increased by 54.4% to 35.8 billion KRW. Fourth-quarter revenue was 462.3 billion KRW, up 15.6% year-on-year and 10.2% quarter-on-quarter, while operating profit for the quarter was 20.3 billion KRW, a 16.1% increase compared to the same period last year.

Fourth-quarter revenue by business segment was ▲Games 98.5 billion KRW ▲Payment and Advertising 191 billion KRW ▲Commerce 80.8 billion KRW ▲Technology 52.0 billion KRW ▲Content 44.6 billion KRW.

The gaming segment recorded 98.5 billion KRW, down 1.5% year-on-year and 1.9% quarter-on-quarter, as the mobile linkage effect of PC Poker and peak season boosted web board game sales by 23% year-on-year, but some mobile games saw natural declines.

Regarding this, NHN CEO Jung Woojin stated during the earnings conference call, "We will improve profitability through a strategy of selection and concentration by terminating some underperforming mobile services."

He added, "We will accelerate efforts to create success not only in the casual genre but also in the mid-core genre. Including January’s Idolmaster Poplinks and ‘Project Now,’ we are preparing around five new titles this year, and we will announce specific launch plans at an appropriate time."

The payment and advertising segment achieved revenue of 191 billion KRW, up 36.2% year-on-year and 13.1% quarter-on-quarter, driven by steady growth in Payco, NHN Korea Cyber Payment, and the advertising corporation. In particular, annual revenue grew 29% year-on-year, and annual operating profit turned positive, supported by a boom in the PG business and expansion of overseas merchants.

Payco-related business achieved an operating profit of 4.5 billion KRW last year, marking its first profitable year. Annual transaction volume reached 7 trillion KRW, an increase of 1 trillion KRW compared to 2019.

CEO Jung noted, "Although offline payments continue to grow, the high proportion of online transactions such as ticket reservations, airlines, duty-free shops, and theaters limited overall transaction growth. This year, we aim to grow transaction volume by over 20-30% in offline areas such as Payco Order and Campus Zone." He also said, "The favorable trend is continuing, and we expect to strengthen our position with differentiated services going forward."

The commerce segment recorded 80.8 billion KRW, growing 14.2% year-on-year and 9.4% quarter-on-quarter, thanks to the growth of NHN Global in the U.S. and the effect of Singles' Day by Acomate, reflecting strong performance in global commerce centered on the U.S. and China. Annual revenue increased 28% year-on-year, and annual operating profit also turned positive.

The technology segment posted revenue of 52.0 billion KRW, up 20.9% year-on-year and 32.7% quarter-on-quarter, supported by new public sector orders and the full-scale cloud business, as well as business results from key subsidiaries such as PNP Secure and Japan’s Tecorus. Annual revenue for the technology segment in 2020 increased 28.6% year-on-year, and fourth-quarter operating profit turned positive.

The content segment recorded 44.6 billion KRW, a 4.9% increase quarter-on-quarter, driven by increased music distribution revenue from NHN Bugs and expanded user base of Pocket Comics.

CEO Jung said, "2020 was a year to verify the potential of NHN as a comprehensive IT company through growth not only in gaming and simple payment businesses but also in commerce and technology businesses, and to accelerate this trajectory. This year, we plan to focus on balanced growth and strengthening positions across all business segments to enhance NHN’s corporate value."

This content was produced with the assistance of AI translation services.