Gravity Reports First Quarter of 2019 Results and Business Updates

Date : 05/13/2019 @ 11:30AM
Source : GlobeNewswire Inc.
Stock : Gravity Co., Ltd. ADS, Each Representing One-Fourth of A Share Of (MM) (GRVY)
Quote : 62.25  -0.75 (-1.19%) @ 12:59AM

Gravity Reports First Quarter of 2019 Results and Business Updates

Gravity (NASDAQ:GRVY)
Historical Stock Chart

2 Months : From Apr 2019 to Jun 2019

Click Here for more Gravity Charts.

GRAVITY Co., Ltd. (NasdaqGM: GRVY) (“Gravity” or “Company”), a developer and publisher of online and mobile games based in South Korea, today announced its unaudited financial results for the first quarter ended March 31, 2019, prepared in accordance with international Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.

FIRST QUARTER 2019 HIGHLIGHTS

  • Gravity has announced that recorded the highest quarterly revenues and operating profit since it listed in NASDAQ in 2005.
  • Total revenues were KRW 133,623 million (US$ 117,595 thousand), representing a 18.0% increase from the fourth quarter ended December 31, 2018 (“QoQ”) and a 101.5% increase from the first quarter ended March 31, 2018 (“YoY”).
  • Operating profit was KRW 23,640 million (US$ 20,804 thousand), representing a 79.9% increase QoQ and a 390.5% increase YoY.
  • Profit before income tax expenses was KRW 24,389million (US$ 21,463 thousand), representing an 82.7% increase QoQ and a 376.6% increase YoY.
  • Net profit attributable to parent company was KRW 19,760 million (US$ 17,390 thousand), representing a 32.0% increase QoQ and a 456.8% increase YoY.

REVIEW OF FIRST QUARTER 2019 FINANCIAL RESULTS

Revenues

Subscription revenues for the first quarter of 2019 were KRW 6,256 million (US$ 5,506 thousand), representing a 28.2 % increase QoQ from KRW 4,880 million and a 29.7% decrease YoY from KRW 8,896 million. The increase QoQ was mainly attributable to increased revenues from Ragnarok Online in Korea and Taiwan, and Ragnarok Prequel in Taiwan. The decrease YoY was largely due to decreased revenues from Ragnarok Prequel in Taiwan and Ragnarok Online in Korea and Taiwan.

Royalty and license fee revenues for the first quarter of 2019 were KRW 3,720 million (US$ 3,274 thousand), representing a 34.4% increase QoQ from KRW 2,768 million and a 19.5% decrease YoY from KRW 4,619 million. The increase QoQ was primarily due to increased revenue from Ragnarok Online in Japan. The decrease YoY resulted mainly from decreased revenues from Ragnarok Online in Japan, Thailand, and Brazil.

Mobile game and application revenues were KRW 121,147 million (US$ 106,615 thousand) for the first quarter of 2019, representing a 17.7% increase QoQ from KRW 102,916 million and a 135.7% increase YoY from KRW 51,396 million. The increase QoQ resulted primarily from increased revenues from Ragnarok M: Eternal Love in Southeast Asia, North America, South America, and Oceania, which was launched on October 31, 2018 and on January 9, 2019, respectively. Such increase was partially offset by decreased revenues from Ragnarok M: Eternal Love in Taiwan and Korea. The increase YoY was primarily due to revenues from Ragnarok M: Eternal Love in Southeast Asia, North America, South America, and Oceania. This increase was partially offset by decreased revenue from Ragnarok M: Eternal Love in Taiwan and Korea, RO: Idle Poring in global markets except for China and Japan, and Ragnarok R in Taiwan and Korea.

Character merchandising and other revenues were KRW 2,500 million (US$ 2,200 thousand) for the first quarter of 2019, representing 6.3% decrease QoQ from KRW 2,668 million and a 78.6% increase YoY from KRW 1,400 million

Cost of Revenue

Cost of revenue was KRW 101,237 million (US$ 89,094 thousand) for the first quarter of 2019, representing a 10.9% increase QoQ from KRW 91,304 million and a 121.1% increase YoY from KRW 45,784 million. The increase QoQ was mainly due to increased commission paid for mobile game services related to Ragnarok M: Eternal love in North, South America and Oceania. The increase YoY was mostly from increased commission paid for mobile game services related to Ragnarok M: Eternal love in Southeast Asia, North, South America and Oceania.

Operating Expenses

Operating expenses were KRW 8,746 million (US$ 7,697 thousand) for the first quarter of 2019, representing a 0.5% decrease QoQ from KRW 8,787 million and a 44.3% decrease YoY from KRW 15,707 million. The decrease QoQ was mainly attributable to decreased salaries and research and development expenses. Such decrease was partially offset by increased advertising expenses. The decrease YoY was mostly resulted from decreased advertising expenses for Ragnarok M: Eternal Love and RO: Idle Poring in Korea.

Profit before income tax expenses

Profit before income tax expenses was KRW 24,389 million (US$ 21,463 thousand) for the first quarter of 2019 compared with profit before income tax expense of KRW 13,351 million for the fourth quarter of 2018 and profit before income tax expenses of KRW 5,117 million for the first quarter of 2018.

Net Profit

As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 19,760 million (US$ 17,390 thousand) for the first quarter of 2019 compared with net profit attributable to parent company of KRW 14,967 million for the fourth quarter of 2018 and a net profit attributable to parent company of KRW 3,549 million for the first quarter of 2018.

Liquidity

The balance of cash and cash equivalents and short-term financial instruments was KRW 127,330 million (US$ 112,057 thousand) as of March 31, 2019.

Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,136.30 to US$ 1.00, the noon buying rate in effect on March 29, 2019 as quoted by the Federal Reserve Bank of New York.

GRAVITY BUSINESS UPDATE

Ragnarok Online IP-based Games

  • Ragnarok M: Eternal Love, a MMORPG mobile game

Gravity is preparing for the service in Japan during 2019 after the launch of Ragnarok M: Eternal Love in North America, South America, and Oceania on January 9, 2019. The game will be published by GungHo Online Entertainment Inc, (“Gungho”) the licensee of Ragnarok Online in Japan and Gungho will make an official announcement of the game release in May.

  • Ragnarok Web MMORPG, a web browser-based 3D new version of game

Ragnarok web MMORPG is scheduled to be launched in Taiwan, Hong Kong, and Macau in the second quarter of 2019. Gravity will start pre-registration for Ragnarok Web 3D on May 23, 2019.

  • Other Ragnarok Online IP-based games

RO Click H5, a HTML 5 version of idle game, has launched in Korea on April 9, 2019. Gravity is collaborating with KT Corporation for co-marketing of 5G game. Gravity is also planning to launch this game globally in 2019.

A 3D Action MORPG mobile game, Ragnarok Spear of Odin, is expected to be launched in Taiwan, Hong Kong, and Macau in 2019. The game was developed by NeoCyon, our Korean based subsidiary and Gravity also is preparing the other games based on Ragnarok Online IP.

Other IP games

  • A MORPG mobile game, RO X Dawn Break, will be launched in Indonesia on May 14, 2019. The game is published by Gravity Game Link, a joint venture in Indonesia.

Investor Presentation

Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of first quarter in 2019 and Gravity’s business plan. The presentation can be found on the Company’s website under the IR Archives section at http://www.gravity.co.kr/en/ir/pds/list.asp. Korean and Japanese versions of the presentation are also provided on the website.

About GRAVITY Co., Ltd. ---------------------------------------------------

Based in Korea, Gravity is a developer and publisher of online and mobile games. Gravity's principal product, Ragnarok Online, is a popular online game in many markets, including Japan and Taiwan, and is currently commercially offered in 83 markets and countries. For more information about Gravity, please visit http://www.gravity.co.kr.

Forward-Looking Statements:

Certain statements in this press release may include, in addition to historical information, “forward-looking statements” within the meaning of the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act 1995. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe”, “project,” or “continue” or the negative thereof or other similar words, although not all forward-looking statements contain these words. Investors should consider the information contained in our submissions and filings with the United States Securities and Exchange Commission (the “SEC”), including our annual report for the fiscal year ended December 31, 2018 on Form 20-F, together with such other documents that we may submit to or file with the SEC from time to time, on Form 6-K. The forward-looking statements speak only as of this press release and we assume no duty to update them to reflect new, changing or unanticipated events or circumstances.

Contact:

Mr. Heung Gon Kim Chief Financial Officer Gravity Co., Ltd. Email: kheung@gravity.co.kr

Ms. Sang Eun Sung IR Manager Gravity Co., Ltd. Email: ir@gravity.co.kr Telephone: +82-2-2132-7800

GRAVITY Co., Ltd.Consolidated Statements of Financial Position

(In millions of KRW and thousands of US$)

  As of 
  31-Dec-18  31-Jun-19 
  KRW  US$  KRW  US$ 
  (audited)  (unaudited)  (unaudited)  (unaudited) 
Assets                
Current assets:                
Cash and cash equivalents  86,051   75,729   111,830   98,416 
Short-term financial instruments  9,500   8,361   15,500   13,641 
Accounts receivable, net  60,664   53,387   50,691   44,610 
Other receivables, net  255   224   250   220 
Prepaid expenses  2,516   2,214   1,846   1,625 
Other current assets  1,182   1,040   1,672   1,471 
Total current assets  160,168   140,955   181,789   159,983 
Property and equipment, net  1,498   1,319   5,148   4,531 
Intangible assets  1,163   1,024   1,022   899 
Deferred tax assets  7,413   6,524   6,978   6,141 
Other non-current financial assets  1,494   1,315   1,497   1,317 
Other non-current assets  1,438   1,265   1,597   1,406 
Total assets  173,174   152,402   198,031   174,277 
Liabilities and Equity                
Current liabilities:                
Accounts payable  71,928   63,300   75,127   66,115 
Deferred revenue  16,476   14,500   14,395   12,668 
Withholdings  2,019   1,777   2,178   1,917 
Accrued expense  1,031   907   1,037   913 
Income tax payable  1,944   1,711   2,640   2,324 
Other current liabilities  123   108   1,926   1,694 
Total current liabilities  93,521   82,303   97,303   85,631 
Long-term deferred revenue  3,598   3,167   2,647   2,330 
Other non-current liabilities  503   443   2,490   2,191 
Total liabilities  97,622   85,913   102,440   90,152 
Share capital  3,474   3,057   3,474   3,058 
Capital surplus  27,141   23,885   27,140   23,885 
Other components of equity  138   122   244   214 
Retained earnings (Accumulated deficit)  45,405   39,958   65,165   57,348 
Equity attributable to owners of the Parent Company  76,158   67,022   96,023   84,505 
Non-controlling interest  (606)  (533)  (432)  (380)
Total equity  75,552   66,489   95,591   84,125 
Total liabilities and equity  173,174   152,402   198,031   174,277 

* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,136.30 to US$ 1.00, the noon buying rate in effect on March 29, 2019 as quoted by the Federal Reserve Bank of New York.

GRAVITY Co., Ltd.Consolidated Statements of Comprehensive Income

(In millions of KRW and thousands of US$ except for share and ADS data)

  Three months ended 
  31-Dec-18  31-Mar-18  31-Mar-19 
  (KRW)  (US$)  (KRW)  (US$)  (KRW)  (US$) 
  (unaudited)  (unaudited)  (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Revenues:                        
Online games-subscription revenue  4,880   4,295   8,896   7,829   6,256   5,506 
Online games-royalties and license fees  2,768   2,436   4,619   4,065   3,720   3,274 
Mobile games and applications  102,916   90,571   51,396   45,231   121,147   106,615 
Character merchandising and other revenue  2,668   2,348   1,400   1,232   2,500   2,200 
Total net revenue  113,232   99,650   66,311   58,357   133,623   117,595 
Cost of revenue  91,304   80,352   45,784   40,292   101,237   89,094 
Gross profit  21,928   19,298   20,527   18,065   32,386   28,501 
Operating expenses:                        
Selling, general and administrative  5,921   5,211   13,827   12,169   6,665   5,865 
Research and development  2,642   2,325   1,874   1,649   1,877   1,652 
Others, net  224   197   6   5   204   180 
Total operating expenses  8,787   7,733   15,707   13,823   8,746   7,697 
Operating profit  13,141   11,565   4,820   4,242   23,640   20,804 
Finance income(costs):                        
Finance income  533   469   590   519   1,062   934 
Finance costs  (323)  (284)  (293)  (258)  (313)  (275)
Profit before income tax  13,351   11,750   5,117   4,503   24,389   21,463 
Income tax expenses(profits)  (1,606)  (1,413)  1,593   1,402   4,627   4,072 
Profit for the period  14,957   13,163   3,524   3,101   19,762   17,391 
Profit attributable to:                        
Non-controlling interest  (10)  (9)  (25)  (22)  2   1 
Owners of Parent company  14,967   13,172   3,549   3,123   19,760   17,390 
Earning per share                        
- Basic and diluted  2,154   1.90   511   0.45   2,844   2.50 
Weighted average number of shares outstanding                        
- Basic and diluted  6,948,900   6,948,900   6,948,900   6,948,900   6,948,900   6,948,900 
Earning per ADS(1)                        
- Basic and diluted  2,154   1.90   511   0.45   2,844   2.50 

* For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,136.30 to US$1.00, the noon buying rate in effect on March 29, 2019 as quoted by the Federal Reserve Bank of New York.(1) Each ADS represents one common share.

Latest GRVY Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....


No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts


Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.


NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.