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.
Gravity (NASDAQ:GRVY)
Historical Stock Chart
From Aug 2024 to Sep 2024
Gravity (NASDAQ:GRVY)
Historical Stock Chart
From Sep 2023 to Sep 2024