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 May 2020
Commission File Number 000-51138
GRAVITY CO., LTD.
(Translation of registrant’s name into English)
15F, 396 World Cup buk-ro, Mapo-gu, Seoul 03925, 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 FIRST QUARTER OF 2020 RESULTS AND BUSINESS UPDATES
Seoul, South Korea – May 29, 2020 – 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,
2020, prepared in accordance with international Financial Reporting
Standards as issued by the International Accounting Standards Board
and business updates.
FIRST QUARTER 2020
HIGHLIGHTS
|
•
|
Total revenues were KRW
73,260 million (US$ 60,102 thousand), representing a 2.2% increase
from the fourth quarter ended December 31, 2019 (“QoQ”) and a 45.2%
decrease from the first quarter ended March 31, 2019
(“YoY”).
|
|
•
|
Operating profit was KRW
10,356 million (US$ 8,496 thousand), representing a 475.7% increase
QoQ and a 56.2% decrease YoY.
|
|
•
|
Profit before income tax
expenses was KRW 11,250 million (US$ 9,229 thousand), representing
a 595.7% increase QoQ and a 53.9 decrease YoY.
|
|
•
|
Net profit attributable
to parent company was KRW 9,263 million (US$ 7,599 thousand),
representing a 2,957.1% increase QoQ and a 53.1% decrease
YoY.
|
REVIEW OF FIRST QUARTER
2020 FINANCIAL RESULTS
Revenues
Subscription revenues for the first quarter of 2020 were KRW 9,893
million (US$ 8,116 thousand), representing a 37.7 % increase QoQ
from KRW 7,185 million and a 58.1% increase YoY from KRW 6,256
million. The increase QoQ was mainly attributable to increased
revenues from Ragnarok
Online and Ragnarok
Prequel in Taiwan. The increase YoY was largely due to
increased revenues from Ragnarok
Online and Ragnarok Prequel
II in Taiwan.
Royalty and license fee revenues for the first quarter of 2020 were
KRW 3,543 million (US$ 2,907 thousand), representing a 45.4%
increase QoQ from KRW 2,436 million and a 4.8% decrease YoY from
KRW 3,720 million. The increase QoQ was primarily due to increased
revenue from Ragnarok
Online in Japan. The decrease YoY resulted mainly from
decreased revenue from Ragnarok
Online in Japan.
Mobile
game revenues were KRW 55,982 million (US$ 45,928 thousand) for the
first quarter of 2020, representing a 1.3% decrease QoQ from KRW
56,714 million and a 53.4% decrease YoY from KRW 120,090 million.
The decrease QoQ resulted primarily from decreased revenues from
Ragnarok M: Eternal Love in
Southeast Asia and Europe, and Ragnarok H5 in Korea. Such decrease was
partially offset by increased revenues from Ragnarok M: Eternal Love in Taiwan and
Ragnarok Tactics in Taiwan
and Southeast Asia that was launched on February 25, 2020 and
January 2, 2020, respectively. The decrease YoY was primarily due
to revenues from Ragnarok M:
Eternal Love in Southeast Asia, North America, South America
and Oceania and Korea. This decrease was partially offset by
increased revenues from
Ragnarok M: Eternal Love
in Japan, Taiwan and Europe, Ragnarok Tactics
in Taiwan, Southeast Asia and Thailand.
Other revenues were KRW 3,842 million (US$ 3,151 thousand) for the
first quarter of 2020, representing 27.7% decrease QoQ from KRW
5,316 million and a 8.0% increase YoY from KRW 3,557 million
Cost of Revenue
Cost of revenue was KRW 48,874 million (US$ 40,096 thousand) for
the first quarter of 2020, representing a 5.3% decrease QoQ from
KRW 51,635 million and a 51.7% decrease YoY from KRW 101,237
million. The decrease QoQ was mainly due to decreased outsourcing
fee, commission paid for mobile game services related to
Ragnarok M: Eternal love in
Southeast Asia and salaries. The decrease YoY was mostly from
decreased commission paid for mobile game services related to
Ragnarok M: Eternal love in
Southeast Asia, North America, South America and Oceania.
Operating
Expenses
Operating expenses were KRW 14,030 million (US$ 11,510 thousand)
for the first quarter of 2020, representing a 23.0% decrease QoQ
from KRW 18,217 million and a 60.4% increase YoY from KRW 8,746
million. The decrease QoQ was mainly attributable to decreased
advertising expenses related to G-star 2019, The Color of Dream Fantasy Latale, Ragnarok M:
Eternal Love, Ragnarok H5 and Ragnarok Click H5. The increase YoY was
mostly resulted from increased advertising expenses for
Ragnarok Tactics in Taiwan,
Southeast Asia and Korea, commission paid, and research and
development expenses.
Profit before income tax
expenses
Profit before income tax expenses was KRW 11,250 million (US$ 9,229
thousand) for the first quarter of 2020 compared with profit before
income tax expense of KRW 1,617 million for the fourth quarter of
2019 and profit before income tax expenses of KRW 24,389 million
for the first quarter of 2019.
Net Profit
As a result of the foregoing factors, Gravity recorded a net profit
attributable to parent company of KRW 9,263 million (US$ 7,599
thousand) for the first quarter of 2020 compared with net profit
attributable to parent company of KRW 303 million for the fourth
quarter of 2019 and a net profit attributable to parent company of
KRW 19,760 million for the first quarter of 2019.
Liquidity
The balance of cash and cash equivalents and short-term financial
instruments was KRW 123,002 million (US$ 100,911 thousand) as
of March 31, 2020.
Note: For convenience purposes only, the KRW amounts have been
expressed in U.S. dollars at the exchange rate of KRW 1,218.92 to
US$ 1.00, the noon buying rate in effect on March 31, 2020 as
quoted by the Federal Reserve Bank of New York.
GRAVITY
BUSINESS UPDATE
Ragnarok Online
Gravity Game Tech, a subsidiary in Thailand, opened Ragnarok online in Thailand on May 28,
2020 and the company announced 4th job
change for Ragnarok online
in Korea on May 27, 2020.
Ragnarok Online IP-based
Games
•
|
Ragnarok Origin, a
MMORPG mobile game
|
Ragnarok Origin is scheduled to be
launched in Korea in July 2020. The first closed beta test (CBT)
has completed on May 13 with users’ positive feedbacks. The company
is preparing its second CBT before the official launch.
•
|
Ragnarok X: Next
Generation, a MMORPG mobile game
|
Ragnarok X: Next Generation is
being prepared for the service in Taiwan, Hong Kong, and Macau in the second
half of 2020.
•
|
Ragnarok Tactics,
a SRPG mobile game
|
Ragnarok Tactics was launched in
Korea on March 31, 2020. The game is scheduled to be launched in
global market for June 2020 target.
•
|
Other
Ragnarok Online IP-based games
|
Ragnarok H5 (locally named
Ragnarok Frontier), an idle RPG
game, was launched
in Indonesia on March 31,
2020.
Other IP games
A First-Person Shooter (FPS) game,
Tactical Warfare, has started pre-registration and will be
launched in North, Central and South America in June 2020. The game
is published by Gravity Interactive, a subsidiary in the United
States.
Investor Presentation
Gravity issued an investor presentation. The presentation contains
the Company’s recent business updates, results of first quarter in
2020 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 93 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,
2020 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
# # #
GRAVITY Co., Ltd.
Consolidated Statements of Financial Position
(In millions of KRW and thousands of US$)
|
|
As of
|
|
|
|
31-Dec-19
|
|
|
31-Mar-20
|
|
|
|
KRW
|
|
|
US$
|
|
|
KRW
|
|
|
US$
|
|
|
|
(audited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
79,428
|
|
|
|
65,163
|
|
|
|
82,502
|
|
|
|
67,685
|
|
Short-term financial instruments
|
|
|
39,500
|
|
|
|
32,406
|
|
|
|
40,500
|
|
|
|
33,226
|
|
Accounts receivable, net
|
|
|
32,253
|
|
|
|
26,460
|
|
|
|
40,748
|
|
|
|
33,430
|
|
Other receivables, net
|
|
|
56
|
|
|
|
46
|
|
|
|
413
|
|
|
|
339
|
|
Prepaid expenses
|
|
|
1,962
|
|
|
|
1,610
|
|
|
|
2,150
|
|
|
|
1,764
|
|
Other current assets
|
|
|
2,664
|
|
|
|
2,186
|
|
|
|
3,869
|
|
|
|
3,173
|
|
Total current assets
|
|
|
155,863
|
|
|
|
127,871
|
|
|
|
170,182
|
|
|
|
139,617
|
|
Property and equipment, net
|
|
|
6,663
|
|
|
|
5,466
|
|
|
|
8,576
|
|
|
|
7,036
|
|
Intangible assets
|
|
|
1,717
|
|
|
|
1,409
|
|
|
|
1,571
|
|
|
|
1,289
|
|
Deferred tax assets
|
|
|
7,667
|
|
|
|
6,290
|
|
|
|
9,042
|
|
|
|
7,418
|
|
Other non-current financial assets
|
|
|
1,770
|
|
|
|
1,452
|
|
|
|
1,771
|
|
|
|
1,453
|
|
Other non-current assets
|
|
|
1,745
|
|
|
|
1,430
|
|
|
|
1,788
|
|
|
|
1,466
|
|
Total assets
|
|
|
175,425
|
|
|
|
143,918
|
|
|
|
192,930
|
|
|
|
158,279
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
37,496
|
|
|
|
30,762
|
|
|
|
42,029
|
|
|
|
34,481
|
|
Deferred revenue
|
|
|
10,748
|
|
|
|
8,818
|
|
|
|
10,389
|
|
|
|
8,523
|
|
Withholdings
|
|
|
1,764
|
|
|
|
1,447
|
|
|
|
2,315
|
|
|
|
1,899
|
|
Accrued expense
|
|
|
1,175
|
|
|
|
964
|
|
|
|
1,186
|
|
|
|
973
|
|
Income tax payable
|
|
|
2,618
|
|
|
|
2,148
|
|
|
|
3,100
|
|
|
|
2,543
|
|
Other current liabilities
|
|
|
1,986
|
|
|
|
1,629
|
|
|
|
2,781
|
|
|
|
2,282
|
|
Total current liabilities
|
|
|
55,787
|
|
|
|
45,768
|
|
|
|
61,800
|
|
|
|
50,701
|
|
Long-term deferred revenue
|
|
|
98
|
|
|
|
80
|
|
|
|
98
|
|
|
|
80
|
|
Other non-current liabilities
|
|
|
3,774
|
|
|
|
3,096
|
|
|
|
4,430
|
|
|
|
3,634
|
|
Total liabilities
|
|
|
59,659
|
|
|
|
48,944
|
|
|
|
66,328
|
|
|
|
54,415
|
|
Share capital
|
|
|
3,474
|
|
|
|
2,850
|
|
|
|
3,474
|
|
|
|
2,850
|
|
Capital surplus
|
|
|
27,128
|
|
|
|
22,256
|
|
|
|
27,128
|
|
|
|
22,256
|
|
Other components of equity
|
|
|
274
|
|
|
|
225
|
|
|
|
1,577
|
|
|
|
1,294
|
|
Retained earnings
|
|
|
84,668
|
|
|
|
69,461
|
|
|
|
93,931
|
|
|
|
77,060
|
|
Equity attributable to owners of the Parent Company
|
|
|
115,544
|
|
|
|
94,792
|
|
|
|
126,110
|
|
|
|
103,460
|
|
Non-controlling interest
|
|
|
222
|
|
|
|
182
|
|
|
|
492
|
|
|
|
404
|
|
Total equity
|
|
|
115,766
|
|
|
|
94,974
|
|
|
|
126,602
|
|
|
|
103,864
|
|
Total liabilities and equity
|
|
|
175,425
|
|
|
|
143,918
|
|
|
|
192,930
|
|
|
|
158,279
|
|
* For convenience purposes only, the KRW amounts are expressed in
U.S. dollars at the rate of KRW 1,218.92 to US$ 1.00, the noon
buying rate in effect on March 31, 2020 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-19
|
|
|
31-Mar-19
|
|
|
31-Mar-20
|
|
|
|
(KRW)
|
|
|
(US$)
|
|
|
(KRW)
|
|
|
(US$)
|
|
|
(KRW)
|
|
|
(US$)
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online games-subscription revenue
|
|
|
7,185
|
|
|
|
5,895
|
|
|
|
6,256
|
|
|
|
5,132
|
|
|
|
9,893
|
|
|
|
8,116
|
|
Online games-royalties and license fees
|
|
|
2,436
|
|
|
|
1,998
|
|
|
|
3,720
|
|
|
|
3,052
|
|
|
|
3,543
|
|
|
|
2,907
|
|
Mobile games
|
|
|
56,714
|
|
|
|
46,528
|
|
|
|
120,090
|
|
|
|
98,522
|
|
|
|
55,982
|
|
|
|
45,928
|
|
Other revenue
|
|
|
5,316
|
|
|
|
4,361
|
|
|
|
3,557
|
|
|
|
2,918
|
|
|
|
3,842
|
|
|
|
3,151
|
|
Total net revenue
|
|
|
71,651
|
|
|
|
58,782
|
|
|
|
133,623
|
|
|
|
109,624
|
|
|
|
73,260
|
|
|
|
60,102
|
|
Cost of revenue
|
|
|
51,635
|
|
|
|
42,361
|
|
|
|
101,237
|
|
|
|
83,055
|
|
|
|
48,874
|
|
|
|
40,096
|
|
Gross profit
|
|
|
20,016
|
|
|
|
16,421
|
|
|
|
32,386
|
|
|
|
26,569
|
|
|
|
24,386
|
|
|
|
20,006
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
15,491
|
|
|
|
12,709
|
|
|
|
6,665
|
|
|
|
5,468
|
|
|
|
11,007
|
|
|
|
9,030
|
|
Research and development
|
|
|
2,845
|
|
|
|
2,334
|
|
|
|
1,877
|
|
|
|
1,540
|
|
|
|
2,872
|
|
|
|
2,356
|
|
Others, net
|
|
|
(119
|
)
|
|
|
(98
|
)
|
|
|
204
|
|
|
|
167
|
|
|
|
151
|
|
|
|
124
|
|
Total operating expenses
|
|
|
18,217
|
|
|
|
14,945
|
|
|
|
8,746
|
|
|
|
7,175
|
|
|
|
14,030
|
|
|
|
11,510
|
|
Operating profit
|
|
|
1,799
|
|
|
|
1,476
|
|
|
|
23,640
|
|
|
|
19,394
|
|
|
|
10,356
|
|
|
|
8,496
|
|
Finance income(costs):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
631
|
|
|
|
518
|
|
|
|
1,062
|
|
|
|
871
|
|
|
|
1,551
|
|
|
|
1,272
|
|
Finance costs
|
|
|
(813
|
)
|
|
|
(667
|
)
|
|
|
(313
|
)
|
|
|
(256
|
)
|
|
|
(657
|
)
|
|
|
(539
|
)
|
Profit before income tax
|
|
|
1,617
|
|
|
|
1,327
|
|
|
|
24,389
|
|
|
|
20,009
|
|
|
|
11,250
|
|
|
|
9,229
|
|
Income tax expenses
|
|
|
1,334
|
|
|
|
1,095
|
|
|
|
4,627
|
|
|
|
3,796
|
|
|
|
2,004
|
|
|
|
1,644
|
|
Profit for the period
|
|
|
283
|
|
|
|
232
|
|
|
|
19,762
|
|
|
|
16,213
|
|
|
|
9,246
|
|
|
|
7,585
|
|
Profit attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest
|
|
|
(20
|
)
|
|
|
(17
|
)
|
|
|
2
|
|
|
|
2
|
|
|
|
(17
|
)
|
|
|
(14
|
)
|
Owners of Parent company
|
|
|
303
|
|
|
|
249
|
|
|
|
19,760
|
|
|
|
16,211
|
|
|
|
9,263
|
|
|
|
7,599
|
|
Earning per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and diluted
|
|
|
44
|
|
|
|
0.04
|
|
|
|
2,844
|
|
|
|
2.33
|
|
|
|
1,333
|
|
|
|
1.09
|
|
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
|
|
|
44
|
|
|
|
0.04
|
|
|
|
2,844
|
|
|
|
2.33
|
|
|
|
1,333
|
|
|
|
1.09
|
|
* For convenience, the KRW amounts are expressed in U.S. dollars at
the rate of KRW 1,218.92 to US$1.00, the noon buying rate in effect
on March 31, 2020 as quoted by the Federal Reserve Bank of New
York.
(1) Each ADS represents one common share.
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: May 29, 2020