Naver, South Korea’s largest internet portal and creator of the messaging app Line, reported an all-time high sales and revenue growth for the final quarter of 2019, in addition to double-digit gains in the company’s advertising and IT platform businesses.
The internet giant’s annual sales exceeded the $5.54 billion (6.59 trillion won) mark for the first time in 2019, with ad revenue increasing to 10.7 percent earlier to $144.64 million (172 billion won), which Naver credited to the launch of new mobile products and higher prices.
However, Naver’s operating profit ended December by dropping 18.7 percent to $146.7 million (173.4 billion won) due to deepening losses at its Japanese unit Line Corp. One-off expenses such as year-end bonuses and share-based compensation adjustments resulting in a share price increase can also be attributed to the loss.
The South Korean company’s revenue totaled $1.5 billion (1.79 trillion won) in the fourth quarter alone, a 17.9 percent increase a year earlier.
Naver’s advertising business climbed to $534.86 million (633 billion won) in annual sales, a 10.7 percent increase from 2018, thanks to the improvement of mobile ad offerings.
The company’s IT platform business rose 28.9 increase in annual sales, reaching $386 million (457 billion won) in 2019. The increase is due to the sustained growth of its payment service Naver pay.
Naver’s online content business more than doubled, marking the most dramatic sales growth in 2019. The platform’s expansion and surging demand for V Live streaming services and webtoons backed the increase by 66.6 percent to $177 million (209 billion won).
Naver also revealed plans to spin off Line to bring its units under a single holding entity named Z Holdings Corp. The decision came after Naver settled a deal last December merging Line with Softbank’s internet affiliate Yahoo Japan. The deal would create a tech giant worth $30 billion (35.5 trillion won) competing better with global internet giants.
In a press conference, Naver’s chief executive, Han Seong-sook, stated that the consolidation would be finalized in October. However, the merger would exclude Line from its consolidated financial reports several months beforehand.
Han also revealed plans to develop Naver Financial, Naver’s financial platform, into a “one-stop asset management platform.”