Naver Corp., recognized as South Korea’s leading online portal operator, announced a significant 31.3 percent decline in its first-quarter net profit compared to the previous year. This downturn in Q1 earnings was primarily driven by substantial foreign exchange losses, as reported by the company on Thursday.
For the three-month period concluding in March, Naver’s net profit reached 291 billion won ($195.9 million). This marks a decrease from 423.7 billion won recorded in the corresponding period last year, according to the official regulatory filing from the tech giant.
A company spokesperson clarified that “the primary reason for this decline was largely attributed to increased translation losses impacting the company’s dollar-denominated debt upon conversion into the local South Korean currency.”
Despite the net profit challenges, Naver reported positive trends in other key financial metrics. Operating profit for the first quarter saw a healthy 7.2 percent increase, reaching 541.8 billion won, up from 505.3 billion won a year prior. Furthermore, total sales (revenue) also demonstrated robust growth, climbing 16.3 percent to 3.24 trillion won from 2.78 trillion won over the same period, highlighting strong underlying business performance.
However, these overall financial results, particularly the net profit figures, did not meet market expectations. Financial analysts had an average net profit estimate of 513.7 billion won, significantly higher than the reported figure, as indicated by a survey conducted by Infomax, the respected financial data arm of News Agency.
Delving into segment performance, sales generated from Naver’s crucial mainstay platform business — encompassing popular services like search engines, online advertising, and e-commerce shopping — expanded by 14.7 percent, reaching 1.8 trillion won compared to the previous year.
Naver’s expanding global business, which includes vibrant online marketplaces and its highly successful webtoon platforms, recorded an impressive 18.4 percent surge in first-quarter sales, totaling 941.6 billion won. Concurrently, the company’s financial technology (FinTech) platform demonstrated strong growth, with sales increasing by 18.9 percent year-on-year to 459.7 billion won, further diversifying Naver’s revenue streams.
