UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2019
Commission File Number 000-51138
GRAVITY CO., LTD.
(Translation of registrant’s name into English)
15F, 396 World Cup buk-ro, Mapo-gu, Seoul 121-795, Korea
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F
☑
Form 40-F
☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
☐
GRAVITY REPORTS SECOND QUARTER OF 2019 RESULTS AND BUSINESS UPDATES
Seoul, South Korea – August 8, 2019 – 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 second quarter ended June 30, 2019, prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.
SECOND QUARTER 2019 HIGHLIGHTS
|
•
|
Total revenues were KRW 78,127 million (US$ 67,667 thousand), representing a 41.5% decrease from the first quarter ended March 31, 2019 (“QoQ”) and a 24.0% increase from the second quarter ended June 30, 2018 (“YoY”).
|
|
•
|
Operating profit was KRW 12,998 million (US$ 11,257 thousand), representing a 45.0% decrease QoQ and a 56.2% increase YoY.
|
|
•
|
Profit before income tax expenses was KRW 14,037million (US$ 12,158 thousand), representing a 42.4% decrease QoQ and a 62.4% increase YoY.
|
|
•
|
Net profit attributable to parent company was KRW 10,861 million (US$ 9,407 thousand), representing a 45.0% decrease QoQ and a 64.2% increase YoY.
|
REVIEW OF SECOND QUARTER 2019 FINANCIAL RESULTS
Revenues
Subscription revenues for the second quarter of 2019 were KRW 6,746 million (US$ 5,843 thousand), representing a 7.8 % increase QoQ from KRW 6,256 million and a 10.3% increase YoY from KRW 6,116 million. The increase QoQ was mainly attributable to increased revenue from
Ragnarok Online
in Taiwan. The increase YoY was largely due to increased revenues from
Ragnarok online
in Taiwan and Korea. Such increase was partially offset by decreased revenue from
Ragnarok Prequel
in Taiwan.
Royalty and license fee revenues for the second quarter of 2019 were KRW 2,832 million (US$ 2,452 thousand), representing a 23.9% decrease QoQ from KRW 3,720 million and a 11.7% decrease YoY from KRW 3,209 million. The decrease QoQ was primarily due to decreased revenue from
Ragnarok Online
in Japan. The decrease YoY resulted mainly from decreased revenues from
Ragnarok Online
in Thailand and Brazil.
Mobile game and application revenues were KRW 66,463 million (US$ 57,565 thousand) for the second quarter of 2019, representing a 45.1% decrease QoQ from KRW 121,147 million and a 28.3% increase YoY from KRW 51,789 million. The decrease QoQ resulted primarily from decreased revenues from
Ragnarok M: Eternal Love
in Southeast Asia, North America, South America, and Oceania, Taiwan, and Korea. Such decrease was partially offset by revenue from
Ragnarok M: Eternal Love
in Japan, which was launched on June 5, 2019. The increase YoY was primarily due to revenues from
Ragnarok M: Eternal Love
in Southeast Asia, North America, South America, Oceania, and Japan. This increase was partially offset by decreased revenues from
Ragnarok M: Eternal Love
in Korea and Taiwan.
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 2,086 million (US$ 1,807 thousand) for the second quarter of 2019, representing 16.6% decrease QoQ from
KRW 2,500 million and a 9.1% increase YoY from KRW 1,912 million
Cost of Revenue
Cost of revenue was KRW 56,858 million (US$ 49,246 thousand) for the second quarter of 2019, representing a 43.8% decrease QoQ from KRW 101,237 million and a 31.8% increase YoY from KRW 43,150 million. The decrease QoQ was mainly due to decreased commission paid for mobile game services related to
Ragnarok M: Eternal love
in Southeast Asia, North America, South America and Oceania, Taiwan, and Korea. The increase YoY was mostly from increased commission paid for mobile game services related to
Ragnarok M: Eternal love
in Southeast Asia, North America, South America and Oceania and salaries.
Operating Expenses
Operating expenses were KRW 8,271 million (US$ 7,164 thousand) for the second quarter of 2019, representing a 5.4% decrease QoQ from KRW 8,746 million and a 28.4% decrease YoY from KRW 11,553 million. The decrease QoQ was mainly attributable to decreased advertising expenses for
Ragnarok M: Eternal Love
in Korea. Such decrease was partially offset by increased commission paid and research and development expenses. The decrease YoY was mostly resulted from decreased advertising expenses for
Ragnarok M: Eternal Love
in Korea. Such decrease was partially offset by increased research and development expenses and salaries.
Profit before income tax expenses
Profit before income tax expenses was KRW 14,037 million (US$ 12,158 thousand) for the second quarter of 2019 compared with profit before income tax expense of KRW 24,389 million for the first quarter of 2019 and profit before income tax expenses of KRW 8,642 million for the second quarter of 2018.
Net Profit
As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 10,861 million (US$ 9,407 thousand) for the second quarter of 2019 compared with net profit attributable to parent company of KRW 19,760 million for the first quarter of 2019 and a net profit attributable to parent company of KRW 6,615 million for the second quarter of 2018.
Liquidity
The balance of cash and cash equivalents and short-term financial instruments was KRW 111,164 million (US$ 96,281 thousand) as
of June 30, 2019.
Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,154.58 to US$ 1.00, the noon buying rate in effect on June 28, 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
|
Ragnarok M: Eternal Love
(locally named
Ragnarok Masters
in Japan) has launched in Japan on June 5, 2019 by GungHo Online Entertainment Inc, (“GungHo”), the licensee of Ragnarok Online. Also, Gravity is preparing the service for Europe (except for some regions), Turkey and Russia in the third quarter of 2019.
•
|
Ragnarok Web MMORPG, a web browser-based 3D new version of game
|
Ragnarok web MMORPG
has launched in Taiwan, Hong Kong, and Macau on June 5, 2019.
•
|
Other Ragnarok Online
IP-based games
|
Gravity is planning to launch
RO Click H5,
a HTML 5 version of idle game globally in September 2019.
A 3D Action MORPG mobile game,
Ragnarok Spear of Odin
, is expected to be launched in Taiwan, Hong Kong, and Macau in the second half of 2019. The game was developed by NeoCyon, our subsidiary in Korea.
Ragnarok Online
•
|
The company is scheduled to be re-launched
Ragnarok Online
in Indonesia in September 2019. The publisher of the game has changed from Gravindo to Gravity Game Link, a joint venture in Indonesia.
|
Other IP games
•
|
The Color of Dream Fantasy Latele
, a MMORPG mobile game
,
is expected to be launched in Japan during the second half of 2019.
|
Investor Presentation
Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of second 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. Jin Lee
Ms. Minji Oh
IR Unit
Gravity Co., Ltd.
Email:
ir@gravity.co.kr
Telephone: +82-2-2132-7800~1
# # #
GRAVITY Co., Ltd.
Consolidated Statements of Financial Position
(In millions of KRW and thousands of US$)
|
|
As of
|
|
|
|
31-Dec-18
|
|
|
30-Jun-19
|
|
|
|
KRW
|
|
|
US$
|
|
|
KRW
|
|
|
US$
|
|
|
|
(audited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
86,051
|
|
|
|
74,530
|
|
|
|
88,664
|
|
|
|
76,793
|
|
Short-term financial instruments
|
|
|
9,500
|
|
|
|
8,228
|
|
|
|
22,500
|
|
|
|
19,488
|
|
Accounts receivable, net
|
|
|
60,664
|
|
|
|
52,542
|
|
|
|
34,817
|
|
|
|
30,156
|
|
Other receivables, net
|
|
|
255
|
|
|
|
221
|
|
|
|
239
|
|
|
|
207
|
|
Prepaid expenses
|
|
|
2,516
|
|
|
|
2,179
|
|
|
|
2,096
|
|
|
|
1,815
|
|
Other current assets
|
|
|
1,182
|
|
|
|
1,024
|
|
|
|
2,390
|
|
|
|
2,070
|
|
Total current assets
|
|
|
160,168
|
|
|
|
138,724
|
|
|
|
150,706
|
|
|
|
130,529
|
|
Property and equipment, net
|
|
|
1,498
|
|
|
|
1,297
|
|
|
|
5,843
|
|
|
|
5,061
|
|
Intangible assets
|
|
|
1,163
|
|
|
|
1,007
|
|
|
|
1,687
|
|
|
|
1,461
|
|
Deferred tax assets
|
|
|
7,413
|
|
|
|
6,421
|
|
|
|
7,035
|
|
|
|
6,093
|
|
Other non-current financial assets
|
|
|
1,494
|
|
|
|
1,294
|
|
|
|
1,554
|
|
|
|
1,346
|
|
Other non-current assets
|
|
|
1,438
|
|
|
|
1,245
|
|
|
|
1,411
|
|
|
|
1,222
|
|
Total assets
|
|
|
173,174
|
|
|
|
149,988
|
|
|
|
168,236
|
|
|
|
145,712
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
71,928
|
|
|
|
62,298
|
|
|
|
38,350
|
|
|
|
33,215
|
|
Deferred revenue
|
|
|
16,476
|
|
|
|
14,270
|
|
|
|
12,421
|
|
|
|
10,758
|
|
Withholdings
|
|
|
2,019
|
|
|
|
1,749
|
|
|
|
1,456
|
|
|
|
1,261
|
|
Accrued expense
|
|
|
1,031
|
|
|
|
893
|
|
|
|
1,050
|
|
|
|
909
|
|
Income tax payable
|
|
|
1,944
|
|
|
|
1,684
|
|
|
|
2,005
|
|
|
|
1,737
|
|
Other current liabilities
|
|
|
123
|
|
|
|
106
|
|
|
|
2,135
|
|
|
|
1,849
|
|
Total current liabilities
|
|
|
93,521
|
|
|
|
81,000
|
|
|
|
57,417
|
|
|
|
49,729
|
|
Long-term deferred revenue
|
|
|
3,598
|
|
|
|
3,116
|
|
|
|
1,960
|
|
|
|
1,698
|
|
Other non-current liabilities
|
|
|
503
|
|
|
|
436
|
|
|
|
2,401
|
|
|
|
2,080
|
|
Total liabilities
|
|
|
97,622
|
|
|
|
84,552
|
|
|
|
61,778
|
|
|
|
53,507
|
|
Share capital
|
|
|
3,474
|
|
|
|
3,009
|
|
|
|
3,474
|
|
|
|
3,009
|
|
Capital surplus
|
|
|
27,141
|
|
|
|
23,506
|
|
|
|
27,140
|
|
|
|
23,506
|
|
Other components of equity
|
|
|
138
|
|
|
|
120
|
|
|
|
277
|
|
|
|
240
|
|
Retained earnings (Accumulated deficit)
|
|
|
45,405
|
|
|
|
39,326
|
|
|
|
76,026
|
|
|
|
65,847
|
|
Equity attributable to owners of the Parent Company
|
|
|
76,158
|
|
|
|
65,961
|
|
|
|
106,917
|
|
|
|
92,602
|
|
Non-controlling interest
|
|
|
(606
|
)
|
|
|
(525
|
)
|
|
|
(459
|
)
|
|
|
(397
|
)
|
Total equity
|
|
|
75,552
|
|
|
|
65,436
|
|
|
|
106,458
|
|
|
|
92,205
|
|
Total liabilities and equity
|
|
|
173,174
|
|
|
|
149,988
|
|
|
|
168,236
|
|
|
|
145,712
|
|
* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,154.58 to US$ 1.00, the noon buying rate in effect on June 28, 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
|
|
|
Six months ended
|
|
|
|
31-Mar-19
|
|
|
30-Jun-18
|
|
|
30-Jun-19
|
|
|
30-Jun-18
|
|
|
30-Jun-19
|
|
|
|
(KRW)
|
|
|
(KRW)
|
|
|
(KRW)
|
|
|
(US$)
|
|
|
(KRW)
|
|
|
(KRW)
|
|
|
(US$)
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online games-subscription revenue
|
|
|
6,256
|
|
|
|
6,116
|
|
|
|
6,746
|
|
|
|
5,843
|
|
|
|
15,012
|
|
|
|
13,002
|
|
|
|
11,261
|
|
Online games-royalties and license fees
|
|
|
3,720
|
|
|
|
3,209
|
|
|
|
2,832
|
|
|
|
2,452
|
|
|
|
7,828
|
|
|
|
6,552
|
|
|
|
5,675
|
|
Mobile games and applications
|
|
|
121,147
|
|
|
|
51,789
|
|
|
|
66,463
|
|
|
|
57,565
|
|
|
|
103,185
|
|
|
|
187,610
|
|
|
|
162,492
|
|
Character merchandising and other revenue
|
|
|
2,500
|
|
|
|
1,912
|
|
|
|
2,086
|
|
|
|
1,807
|
|
|
|
3,312
|
|
|
|
4,586
|
|
|
|
3,972
|
|
Total net revenue
|
|
|
133,623
|
|
|
|
63,026
|
|
|
|
78,127
|
|
|
|
67,667
|
|
|
|
129,337
|
|
|
|
211,750
|
|
|
|
183,400
|
|
Cost of revenue
|
|
|
101,237
|
|
|
|
43,150
|
|
|
|
56,858
|
|
|
|
49,246
|
|
|
|
88,934
|
|
|
|
158,095
|
|
|
|
136,929
|
|
Gross profit
|
|
|
32,386
|
|
|
|
19,876
|
|
|
|
21,269
|
|
|
|
18,421
|
|
|
|
40,403
|
|
|
|
53,655
|
|
|
|
46,471
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
6,665
|
|
|
|
9,470
|
|
|
|
5,733
|
|
|
|
4,966
|
|
|
|
23,297
|
|
|
|
12,398
|
|
|
|
10,738
|
|
Research and development
|
|
|
1,877
|
|
|
|
1,742
|
|
|
|
2,432
|
|
|
|
2,106
|
|
|
|
3,616
|
|
|
|
4,309
|
|
|
|
3,732
|
|
Others, net
|
|
|
204
|
|
|
|
341
|
|
|
|
106
|
|
|
|
92
|
|
|
|
347
|
|
|
|
310
|
|
|
|
268
|
|
Total operating expenses
|
|
|
8,746
|
|
|
|
11,553
|
|
|
|
8,271
|
|
|
|
7,164
|
|
|
|
27,260
|
|
|
|
17,017
|
|
|
|
14,738
|
|
Operating profit
|
|
|
23,640
|
|
|
|
8,323
|
|
|
|
12,998
|
|
|
|
11,257
|
|
|
|
13,143
|
|
|
|
36,638
|
|
|
|
31,733
|
|
Finance income(costs):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
1,062
|
|
|
|
892
|
|
|
|
1,141
|
|
|
|
989
|
|
|
|
1,482
|
|
|
|
2,203
|
|
|
|
1,907
|
|
Finance costs
|
|
|
(313
|
)
|
|
|
(573
|
)
|
|
|
(102
|
)
|
|
|
(88
|
)
|
|
|
(866
|
)
|
|
|
(415
|
)
|
|
|
(359
|
)
|
Profit before income tax
|
|
|
24,389
|
|
|
|
8,642
|
|
|
|
14,037
|
|
|
|
12,158
|
|
|
|
13,759
|
|
|
|
38,426
|
|
|
|
33,281
|
|
Income tax expenses(profits)
|
|
|
(4,627
|
)
|
|
|
(2,042
|
)
|
|
|
(3,208
|
)
|
|
|
(2,779
|
)
|
|
|
(3,635
|
)
|
|
|
(7,835
|
)
|
|
|
(6,786
|
)
|
Profit for the year
|
|
|
19,762
|
|
|
|
6,600
|
|
|
|
10,829
|
|
|
|
9,379
|
|
|
|
10,124
|
|
|
|
30,591
|
|
|
|
26,495
|
|
Profit attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest
|
|
|
2
|
|
|
|
(15
|
)
|
|
|
(32
|
)
|
|
|
(28
|
)
|
|
|
(40
|
)
|
|
|
(30
|
)
|
|
|
(26
|
)
|
Owners of Parent company
|
|
|
19,760
|
|
|
|
6,615
|
|
|
|
10,861
|
|
|
|
9,407
|
|
|
|
10,164
|
|
|
|
30,621
|
|
|
|
26,521
|
|
Earning per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and diluted
|
|
|
2,844
|
|
|
|
952
|
|
|
|
1,563
|
|
|
|
1.40
|
|
|
|
1,463
|
|
|
|
4,407
|
|
|
|
3.80
|
|
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
|
|
|
|
6,948,900
|
|
Earning per ADS
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and diluted
|
|
|
2,844
|
|
|
|
952
|
|
|
|
1,563
|
|
|
|
1.40
|
|
|
|
1,463
|
|
|
|
4,407
|
|
|
|
3.80
|
|
* For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,154.58 to US$1.00, the noon buying rate in effect on June 28, 2019 as quoted by the Federal Reserve Bank of New York.
(1)
Each ADS represents one common shares.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
GRAVITY CO., LTD.
|
|
|
By:
|
/s/ Heung Gon Kim
|
Name:
|
Heung Gon Kim
|
Title:
|
Chief Financial Officer
|
Date: August 8, 2019
Gravity (NASDAQ:GRVY)
Historical Stock Chart
From Aug 2024 to Sep 2024
Gravity (NASDAQ:GRVY)
Historical Stock Chart
From Sep 2023 to Sep 2024