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, 2021, prepared in accordance with
international Financial Reporting Standards as issued by the
International Accounting Standards Board and business updates.
FIRST QUARTER 2021
HIGHLIGHTS
- Total revenues were KRW 105,059
million (US$ 93,243 thousand), representing a 6.6% decrease from
the fourth quarter ended December 31, 2020 (“QoQ”) and a 43.4%
increase from the first quarter ended March 31, 2020 (“YoY”).
- Operating profit was KRW 27,953
million (US$ 24,809 thousand), representing a 2.2% increase QoQ and
a 169.9% increase YoY.
- Profit before income tax expenses
was KRW 28,620 million (US$ 25,401 thousand), representing a 7.0%
increase QoQ and a 154.4% increase YoY.
- Net profit attributable to parent
company was KRW 23,565 million (US$ 20,915 thousand), representing
a 56.4% increase QoQ and a 154.4% increase YoY.
REVIEW OF FIRST QUARTER 2021 FINANCIAL
RESULTS
Revenues
Online game revenues for the first quarter of
2021 were KRW 19,458 million (US$ 17,270 thousand), representing a
26.6 % increase QoQ from KRW 15,370 million and a 44.8% increase
YoY from KRW 13,436 million. The increase QoQ was mainly
attributable to increased revenues from Ragnarok Online in Taiwan
and Japan. The increase YoY was largely due to increased revenues
from Ragnarok Online in Thailand and Japan.
Mobile game revenues were KRW 82,438 million
(US$ 73,166 thousand) for the first quarter of 2021, representing a
10.9% decrease QoQ from KRW 92,562 million and a 47.3% increase YoY
from KRW 55,982 million. The decrease QoQ resulted primarily from
decreased revenues from Ragnarok X: Next Generation in Taiwan, Hong
Kong and Macau and Ragnarok Origin in Korea. Such decrease was
partially offset by increased revenues from Tera Classic in Japan
that was launched on January 29, 2021 and Ragnarok M: Eternal Love
in Southeast Asia. The increase YoY was primarily due to revenues
from Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and
Ragnarok Origin in Korea. This increase was partially offset by
decreased revenues from Ragnarok M: Eternal Love in Taiwan,
Southeast Asia, North America, Japan, Korea and Europe and Ragnarok
Tactics.
Other revenues were KRW 3,163 million (US$ 2,807
thousand) for the first quarter of 2021, representing 29.8%
decrease QoQ from KRW 4,508 million and an 17.7% decrease YoY from
KRW 3,842 million.
Cost of Revenue
Cost of revenue was KRW 57,553 million (US$
51,080 thousand) for the first quarter of 2021, representing a
11.4% decrease QoQ from KRW 64,966 million and a 17.8% increase YoY
from KRW 48,874 million. The decrease QoQ was mainly due to
decreased commission paid for mobile game services related to
Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and
Ragnarok Origin in Korea. The increase YoY was mostly from
increased commission paid for mobile game services related to
Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and
Ragnarok Origin in Korea.
Operating Expenses
Operating expenses were KRW 19,553 million (US$
17,354 thousand) for the first quarter of 2021, representing a 2.9%
decrease QoQ from KRW 20,131 million and a 39.4% increase YoY from
KRW 14,030 million. The decrease QoQ was mainly attributable to
decreased advertising expenses for Ragnarok Origin in Korea and The
Labyrinth of Ragnarok in Southeast Asia, and research and
development expenses. The increase YoY was mostly resulted from
increased advertising expenses for Tera Classic in Japan, The
Labyrinth of Ragnarok in global and The Lord in Thailand, research
and development expenses and commission paid.
Profit Before Income Tax Expenses
Profit before income tax expenses was KRW 28,620
million (US$ 25,401 thousand) for the first quarter of 2021
compared with profit before income tax expense of KRW 26,751
million for the fourth quarter of 2020 and profit before income tax
expenses of KRW 11,250 million for the first quarter of 2020.
Net Profit
As a result of the foregoing factors, Gravity
recorded a net profit attributable to parent company of KRW 23,565
million (US$ 20,915 thousand) for the first quarter of 2021
compared with net profit attributable to parent company of KRW
15,064 million for the fourth quarter of 2020 and a net profit
attributable to parent company of KRW 9,263 million for the first
quarter of 2020.
Liquidity
The balance of cash and cash equivalents and
short-term financial instruments was KRW 194,754 million (US$
172,850 thousand) as of March 31, 2021.
Note: For convenience purposes only, the KRW
amounts have been expressed in U.S. dollars at the exchange rate of
KRW 1,126.72 to US$ 1.00, the noon buying rate in effect on March
31, 2021 as quoted by the Federal Reserve Bank of New York.
GRAVITY BUSINESS UPDATE
Ragnarok Online IP-based
Games
- Ragnarok Origin, a MMORPG mobile
game
Ragnarok Origin is being prepared for launch in
Japan in the second quarter of 2021. The closed beta test (“CBT”)
has completed on April 22 with users’ positive feedbacks.
- Ragnarok X: Next Generation, a
MMORPG mobile game
Ragnarok X: Next Generation has started the CBT
and pre-registration on April 23, 2021. The game is being prepared
for launch in Southeast Asia in June 2021.
- The Labyrinth of Ragnarok, a Time
Effective MMORPG mobile game
The Labyrinth of Ragnarok was launched in global
including Korea (except Taiwan, Hong Kong, Macau, China and Japan)
on March 23, 2021.
- Ragnarok: Poring Merge, a Time
Effective RPG
Ragnarok: Poring Merge was launched in global on
April 12, 2021.
- Other Ragnarok Online IP-based
games
The Lost Memories: a Song of Valkyrie, a Story
RPG mobile game, is expected to be launched in Thailand, North
America and global in the second half of 2021. The game was
developed by Gravity NeoCyon, Inc., our subsidiary in Korea.
Project S (Tentative title), a MMORPG mobile
game, is scheduled to start the CBT in the second half of 2021.
Other IP games
The Lord, a SRPG mobile game, is expected to be
launched in Indonesia, Vietnam, Taiwan, Hong Kong and Macau in the
second half of 2021.
CPBL Pro-baseball 2021, a Sports mobile game,
will be launched in Taiwan, Hong Kong and Macau on June 17,
2021.
Investor Presentation
Gravity issued an investor presentation. The
presentation contains the Company’s recent business updates,
results of the first quarter in 2021 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.
---------------------------------------------------
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 KimChief Financial
OfficerGravity Co., Ltd.Email: kheung@gravity.co.kr
Ms. Jin LeeMs. Hye Ji An IR UnitGravity
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$)
|
|
As of |
|
|
|
31-Dec-20 |
|
|
31-Mar-21 |
|
|
|
KRW |
|
|
US$ |
|
|
KRW |
|
|
US$ |
|
|
|
(audited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
110,632 |
|
|
|
|
98,189 |
|
|
|
|
116,754 |
|
|
|
103,623 |
|
Short-term financial instruments |
|
|
71,000 |
|
|
|
|
63,015 |
|
|
|
|
78,000 |
|
|
|
69,227 |
|
Accounts receivable, net |
|
|
59,761 |
|
|
|
|
53,040 |
|
|
|
|
62,994 |
|
|
|
55,909 |
|
Other receivables, net |
|
|
8 |
|
|
|
|
7 |
|
|
|
|
183 |
|
|
|
162 |
|
Prepaid expenses |
|
|
2,238 |
|
|
|
|
1,986 |
|
|
|
|
1,989 |
|
|
|
1,765 |
|
Other current assets |
|
|
2,946 |
|
|
|
|
2,615 |
|
|
|
|
3,220 |
|
|
|
2,859 |
|
Total current assets |
|
|
246,585 |
|
|
|
|
218,852 |
|
|
|
|
263,140 |
|
|
|
233,545 |
|
Property and equipment, net |
|
|
7,695 |
|
|
|
|
6,830 |
|
|
|
|
8,286 |
|
|
|
7,354 |
|
Intangible assets, net |
|
|
3,363 |
|
|
|
|
2,985 |
|
|
|
|
3,746 |
|
|
|
3,325 |
|
Deferred tax assets |
|
|
3,590 |
|
|
|
|
3,186 |
|
|
|
|
2,810 |
|
|
|
2,494 |
|
Other non-current financial assets |
|
|
1,324 |
|
|
|
|
1,175 |
|
|
|
|
2,070 |
|
|
|
1,837 |
|
Other non-current assets |
|
|
2,815 |
|
|
|
|
2,498 |
|
|
|
|
1,916 |
|
|
|
1,701 |
|
Total assets |
|
|
265,372 |
|
|
|
|
235,526 |
|
|
|
|
281,968 |
|
|
|
250,256 |
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
52,688 |
|
|
|
|
46,762 |
|
|
|
|
47,651 |
|
|
|
42,292 |
|
Deferred revenue |
|
|
13,692 |
|
|
|
|
12,152 |
|
|
|
|
11,902 |
|
|
|
10,563 |
|
Withholdings |
|
|
2,851 |
|
|
|
|
2,530 |
|
|
|
|
2,991 |
|
|
|
2,655 |
|
Accrued expense |
|
|
1,365 |
|
|
|
|
1,211 |
|
|
|
|
1,261 |
|
|
|
1,119 |
|
Income tax payable |
|
|
9,470 |
|
|
|
|
8,405 |
|
|
|
|
8,575 |
|
|
|
7,611 |
|
Other current liabilities |
|
|
2,654 |
|
|
|
|
2,356 |
|
|
|
|
2,745 |
|
|
|
2,436 |
|
Total current liabilities |
|
|
82,720 |
|
|
|
|
73,416 |
|
|
|
|
75,125 |
|
|
|
66,676 |
|
Long-term deferred revenue |
|
|
101 |
|
|
|
|
90 |
|
|
|
|
185 |
|
|
|
164 |
|
Other non-current liabilities |
|
|
5,203 |
|
|
|
|
4,618 |
|
|
|
|
4,593 |
|
|
|
4,077 |
|
Total liabilities |
|
|
88,024 |
|
|
|
|
78,124 |
|
|
|
|
79,903 |
|
|
|
70,917 |
|
Share capital |
|
|
3,474 |
|
|
|
|
3,083 |
|
|
|
|
3,474 |
|
|
|
3,083 |
|
Capital surplus |
|
|
27,110 |
|
|
|
|
24,061 |
|
|
|
|
27,110 |
|
|
|
24,061 |
|
Other components of equity |
|
|
(1,045 |
) |
|
|
|
(927 |
) |
|
|
|
112 |
|
|
|
99 |
|
Retained earnings |
|
|
147,371 |
|
|
|
|
130,796 |
|
|
|
|
170,936 |
|
|
|
151,711 |
|
Equity attributable to owners of the Parent Company |
|
|
176,910 |
|
|
|
|
157,013 |
|
|
|
|
201,632 |
|
|
|
178,954 |
|
Non-controlling interest |
|
|
438 |
|
|
|
|
389 |
|
|
|
|
433 |
|
|
|
385 |
|
Total equity |
|
|
177,348 |
|
|
|
|
157,402 |
|
|
|
|
202,065 |
|
|
|
179,339 |
|
Total liabilities and equity |
|
|
265,372 |
|
|
|
|
235,526 |
|
|
|
|
281,968 |
|
|
|
250,256 |
|
* For convenience purposes only, the KRW amounts
are expressed in U.S. dollars at the rate of KRW 1,126.72 to US$
1.00, the noon buying rate in effect on March 31, 2021 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-20 |
|
|
31-Mar-20 |
|
|
31-Mar-21 |
|
|
|
(KRW) |
|
|
(US$) |
|
|
(KRW) |
|
|
(US$) |
|
|
(KRW) |
|
|
(US$) |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online games |
|
|
15,370 |
|
|
|
|
13,641 |
|
|
|
|
13,436 |
|
|
|
|
11,925 |
|
|
|
|
19,458 |
|
|
|
|
17,270 |
|
|
Mobile games |
|
|
92,562 |
|
|
|
|
82,152 |
|
|
|
|
55,982 |
|
|
|
|
49,686 |
|
|
|
|
82,438 |
|
|
|
|
73,166 |
|
|
Other revenue |
|
|
4,508 |
|
|
|
|
4,001 |
|
|
|
|
3,842 |
|
|
|
|
3,410 |
|
|
|
|
3,163 |
|
|
|
|
2,807 |
|
|
Total net revenue |
|
|
112,440 |
|
|
|
|
99,794 |
|
|
|
|
73,260 |
|
|
|
|
65,021 |
|
|
|
|
105,059 |
|
|
|
|
93,243 |
|
|
Cost of revenue |
|
|
64,966 |
|
|
|
|
57,659 |
|
|
|
|
48,874 |
|
|
|
|
43,377 |
|
|
|
|
57,553 |
|
|
|
|
51,080 |
|
|
Gross profit |
|
|
47,474 |
|
|
|
|
42,135 |
|
|
|
|
24,386 |
|
|
|
|
21,644 |
|
|
|
|
47,506 |
|
|
|
|
42,163 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
15,708 |
|
|
|
|
13,941 |
|
|
|
|
11,007 |
|
|
|
|
9,769 |
|
|
|
|
15,508 |
|
|
|
|
13,764 |
|
|
Research and development |
|
|
4,358 |
|
|
|
|
3,868 |
|
|
|
|
2,872 |
|
|
|
|
2,549 |
|
|
|
|
4,009 |
|
|
|
|
3,558 |
|
|
Others, net |
|
|
65 |
|
|
|
|
58 |
|
|
|
|
151 |
|
|
|
|
134 |
|
|
|
|
36 |
|
|
|
|
32 |
|
|
Total operating expenses |
|
|
20,131 |
|
|
|
|
17,867 |
|
|
|
|
14,030 |
|
|
|
|
12,452 |
|
|
|
|
19,553 |
|
|
|
|
17,354 |
|
|
Operating profit |
|
|
27,343 |
|
|
|
|
24,268 |
|
|
|
|
10,356 |
|
|
|
|
9,192 |
|
|
|
|
27,953 |
|
|
|
|
24,809 |
|
|
Finance income(costs): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income |
|
|
476 |
|
|
|
|
422 |
|
|
|
|
1,551 |
|
|
|
|
1,377 |
|
|
|
|
1,600 |
|
|
|
|
1,420 |
|
|
Finance costs |
|
|
(1,068 |
) |
|
|
|
(947 |
) |
|
|
|
(657 |
) |
|
|
|
(583 |
) |
|
|
|
(933 |
) |
|
|
|
(828 |
) |
|
Profit before income tax |
|
|
26,751 |
|
|
|
|
23,743 |
|
|
|
|
11,250 |
|
|
|
|
9,986 |
|
|
|
|
28,620 |
|
|
|
|
25,401 |
|
|
Income tax expense |
|
|
11,768 |
|
|
|
|
10,444 |
|
|
|
|
2,004 |
|
|
|
|
1,779 |
|
|
|
|
5,059 |
|
|
|
|
4,490 |
|
|
Profit for the year |
|
|
14,983 |
|
|
|
|
13,299 |
|
|
|
|
9,246 |
|
|
|
|
8,207 |
|
|
|
|
23,561 |
|
|
|
|
20,911 |
|
|
Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest |
|
|
(81 |
) |
|
|
|
(71 |
) |
|
|
|
(17 |
) |
|
|
|
(15 |
) |
|
|
|
(4 |
) |
|
|
|
(4 |
) |
|
Owners of Parent company |
|
|
15,064 |
|
|
|
|
13,370 |
|
|
|
|
9,263 |
|
|
|
|
8,222 |
|
|
|
|
23,565 |
|
|
|
|
20,915 |
|
|
Earning per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and diluted |
|
|
2,168 |
|
|
|
|
1.92 |
|
|
|
|
1,333 |
|
|
|
|
1.18 |
|
|
|
|
3,391 |
|
|
|
|
3.01 |
|
|
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 |
|
|
2,168 |
|
|
|
|
1.92 |
|
|
|
|
1,333 |
|
|
|
|
1.18 |
|
|
|
|
3,391 |
|
|
|
|
3.01 |
|
|
* For convenience, the KRW amounts are expressed
in U.S. dollars at the rate of KRW 1,126.72 to US$1.00, the noon
buying rate in effect on March 31, 2021 as quoted by the Federal
Reserve Bank of New York.(1) Each ADS represents one common
share.
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