GRAVITY Co., Ltd. (Nasdaq GM: 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 third quarter ended September 30, 2021, prepared in
accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board and business
updates.
THIRD QUARTER
2021 HIGHLIGHTS
- Total revenues were KRW 128,670
million (US$ 108,702 thousand), representing a 53.9% increase from
the second quarter ended June 30, 2021 (“QoQ”) and a 2.4% decrease
from the third quarter ended September 30, 2020 (“YoY”).
- Operating profit was KRW 40,242
million (US$ 33,997 thousand), representing a 110.1% increase QoQ
and a 17.1% increase YoY.
- Profit before income tax expenses
was KRW 41,435 million (US$ 35,005 thousand), representing a 113.7%
increase QoQ and a 23.0% increase YoY.
- Net profit attributable to parent
company was KRW 26,351 million (US$ 22,262 thousand), representing
a 78.5% increase QoQ and a 4.2% increase YoY.
REVIEW OF
THIRD QUARTER
2021 FINANCIAL
RESULTS
Revenues
Online game revenues for the third quarter of
2021 were KRW 18,295 million (US$ 15,456 thousand), representing a
18.3% decrease QoQ from KRW 22,380 million and a 42.5% decrease YoY
from KRW 31,833 million. The decrease QoQ was mainly attributable
to decreased revenues from Ragnarok Online in Thailand and Japan.
Such decrease was partially offset by increased revenues from
Ragnarok Online in Taiwan. The decrease YoY was largely due to
decreased revenues from Ragnarok Online in Thailand.
Mobile game revenues were KRW 106,218 million
(US$ 89,734 thousand) for the third quarter of 2021, representing a
92.6% increase QoQ from KRW 55,140 million and a 11.2% increase YoY
from KRW 95,531 million. The increase QoQ resulted primarily from
increased revenues from Ragnarok X: Next Generation in Southeast
Asia that was launched on June 18, 2021 and Ragnarok Origin in
Japan that was launched on June 28, 2021. Such increase was
partially offset by decreased revenues from Ragnarok Origin in
Korea, Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau
and Ragnarok M: Eternal Love in Southeast Asia. The increase YoY
was primarily due to revenues from Ragnarok X: Next Generation in
Southeast Asia, Taiwan, Hong Kong and Macau, and Ragnarok Origin in
Japan. This increase was partially offset by decreased revenues
from Ragnarok Origin in Korea and Ragnarok M: Eternal Love.
Other revenues were KRW 4,157 million (US$ 3,512
thousand) for the third quarter of 2021, representing a 31.8%
decrease QoQ from KRW 6,091 million and a 6.2% decrease YoY from
KRW 4,431 million.
Cost of Revenues
Cost of revenue was KRW 66,146 million (US$
55,881 thousand) for the third quarter of 2021, representing a
44.3% increase QoQ from KRW 45,842 million and a 10.7% decrease YoY
from KRW 74,107 million. The increase QoQ was mainly due to
increased commission paid for mobile game services related to
Ragnarok X: Next Generation in Southeast Asia and Ragnarok Origin
in Japan. The decrease YoY was mostly from decreased commission
paid for mobile game services related to Ragnarok M: Eternal Love
and Ragnarok Origin in Korea.
Operating Expenses
Operating expenses were KRW 22,282 million (US$
18,824 thousand) for the third quarter of 2021, representing a
19.7% increase QoQ from KRW 18,612 million and a 4.5% decrease YoY
from KRW 23,332 million. The increase QoQ was mainly attributable
to increased advertising expenses for Ragnarok: The Lost Memories
in Thailand and Ragnarok Origin in Korea, United States and Canada,
and salaries. The decrease YoY was mostly resulted from decreased
advertising expenses for Ragnarok Origin in Korea, commission paid
for payment gate way fees related to Ragnarok Online in Thailand,
and research and development expenses.
Profit before income tax expenses
Profit before income tax expenses was KRW 41,435
million (US$ 35,005 thousand) for the third quarter of 2021
compared with profit before income tax expense of KRW 19,387
million for the second quarter of 2021 and profit before income tax
expenses of KRW 33,675 million for the third quarter of 2020.
Net Profit
As a result of the foregoing factors, Gravity
recorded a net profit attributable to parent company of KRW 26,351
million (US$ 22,262 thousand) for the third quarter of 2021
compared with net profit attributable to parent company of KRW
14,766 million for the second quarter of 2021 and a net profit
attributable to parent company of KRW 25,281 million for the third
quarter of 2020.
Liquidity
The balance of cash and cash equivalents and
short-term financial instruments was KRW 226,173 million (US$
191,073 thousand) as of September 30, 2021.
Note: For convenience purposes only, the KRW
amounts have been expressed in U.S. dollars at the exchange rate of
KRW 1,183.70 to US$ 1.00, the noon buying rate in effect on
September 30, 2021 as quoted by the Federal Reserve Bank of New
York.
GRAVITY BUSINESS UPDATE
Ragnarok Online
Gravity Game Tech, a subsidiary in Thailand,
opened Ragnarok Classic, the new server of Ragnarok Online, in
Thailand on October 28, 2021 and Gravity Game Link, a subsidiary in
Indonesia, is also preparing to launch the new server, Ragnarok
Retro, in Indonesia on December 15, 2021. Ragnarok Online is
expected to be relaunched in the Philippines, Singapore and
Malaysia in the first half of 2022, and Gravity Game Hub, a
subsidiary in Singapore, will publish this game.
Ragnarok Online
IP-based Games
- Ragnarok X:
Next Generation, a MMORPG mobile game
Ragnarok X: Next Generation was launched in
Vietnam on September 1, 2021.
- Ragnarok
Origin, a MMORPG mobile game
Ragnarok Origin was launched in the United
States and Canada on November 10, 2021 and ranked as the second in
free download of Google Play in the United States on the launching
day. The game is scheduled to be launched in Taiwan, Hong Kong and
Macau in the first half of 2022, and in Southeast Asia in the
second half of 2022.
- Other Ragnarok
Online IP-based games
Ragnarok: The Lost Memories, a Cinematic Newtro
Story RPG mobile game, was launched in Thailand in August 26, 2021.
The game is scheduled to be launched in the Philippines, Singapore
and Malaysia on December, 2021 and in North America in the first
half of 2022. Gravity NeoCyon, Inc., our subsidiary in Korea, has
developed the game.
Ragnarok V: Returns, a MMORPG mobile game, is
expected to hold the closed beta test (“CBT”) in Oceania in
December 2021 and is scheduled to be launched in the first quarter
of 2022. The game has been developed by Gravity NeoCyon, Inc., our
subsidiary in Korea.
Ragnarok Begins, a MMORPG PC game, has completed
the CBT on September 7, 2021 with users’ positive feedbacks. The
company is preparing to design the game as a cross-platform game
across PC and mobile, and the game has been developed by
Gravity.
Project T (Tentative title), a Card SRPG mobile
game, is expected to be launched in Taiwan, Hong Kong and Macau in
the first quarter of 2022.
Other IP games
NBA RISE TO STARDOM, a Sports mobile game, has
started the open beta test (“OBT”) and pre-registration on
September 28, 2021. The game is expected to be launched in Japan in
November, 2021 and in Korea in the first half of 2022.
SADAKO M, a Mystery Solving Horror Escape
Adventure mobile game, was launched in Japan on October 26,
2021.
Grandia HD Collection, a RPG console game, was
released in Korea, Taiwan and Hong Kong on October 1, 2021. The
game consists of a bundle of RPG classics Grandia and Grandia II
and supports Korean and Chinese languages. Nintendo Switch is
available for the game.
Investor Presentation
Gravity issued an investor presentation. The
presentation contains the Company’s recent business updates,
results of the third 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.
---------------------------------------------------
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 91 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$)
|
|
As of |
|
|
|
31-Dec-20 |
|
|
30-Sep-21 |
|
|
|
KRW |
|
|
US$ |
|
|
KRW |
|
|
US$ |
|
|
|
(audited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
110,632 |
|
|
|
|
93,463 |
|
|
|
|
118,173 |
|
|
|
99,834 |
|
Short-term financial instruments |
|
|
71,000 |
|
|
|
|
59,981 |
|
|
|
|
108,000 |
|
|
|
91,239 |
|
Accounts receivable, net |
|
|
59,761 |
|
|
|
|
50,487 |
|
|
|
|
82,071 |
|
|
|
69,334 |
|
Other receivables, net |
|
|
8 |
|
|
|
|
7 |
|
|
|
|
11 |
|
|
|
9 |
|
Prepaid expenses |
|
|
2,238 |
|
|
|
|
1,891 |
|
|
|
|
2,061 |
|
|
|
1,741 |
|
Other current assets |
|
|
2,946 |
|
|
|
|
2,489 |
|
|
|
|
3,958 |
|
|
|
3,344 |
|
Total current assets |
|
|
246,585 |
|
|
|
|
208,318 |
|
|
|
|
314,274 |
|
|
|
265,501 |
|
Property and equipment, net |
|
|
7,695 |
|
|
|
|
6,501 |
|
|
|
|
10,307 |
|
|
|
8,707 |
|
Intangible assets |
|
|
3,363 |
|
|
|
|
2,841 |
|
|
|
|
3,400 |
|
|
|
2,872 |
|
Deferred tax assets |
|
|
3,590 |
|
|
|
|
3,033 |
|
|
|
|
787 |
|
|
|
665 |
|
Other non-current financial assets |
|
|
1,324 |
|
|
|
|
1,119 |
|
|
|
|
2,388 |
|
|
|
2,017 |
|
Other non-current assets |
|
|
2,815 |
|
|
|
|
2,377 |
|
|
|
|
1,578 |
|
|
|
1,335 |
|
Total assets |
|
|
265,372 |
|
|
|
|
224,189 |
|
|
|
|
332,734 |
|
|
|
281,097 |
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
52,688 |
|
|
|
|
44,511 |
|
|
|
|
56,702 |
|
|
|
47,902 |
|
Deferred revenue |
|
|
13,692 |
|
|
|
|
11,567 |
|
|
|
|
11,076 |
|
|
|
9,357 |
|
Withholdings |
|
|
2,851 |
|
|
|
|
2,409 |
|
|
|
|
5,162 |
|
|
|
4,361 |
|
Accrued expense |
|
|
1,365 |
|
|
|
|
1,153 |
|
|
|
|
1,354 |
|
|
|
1,144 |
|
Income tax payable |
|
|
9,470 |
|
|
|
|
8,000 |
|
|
|
|
3,684 |
|
|
|
3,112 |
|
Other current liabilities |
|
|
2,654 |
|
|
|
|
2,242 |
|
|
|
|
2,945 |
|
|
|
2,488 |
|
Total current liabilities |
|
|
82,720 |
|
|
|
|
69,882 |
|
|
|
|
80,923 |
|
|
|
68,364 |
|
Long-term deferred revenue |
|
|
101 |
|
|
|
|
85 |
|
|
|
|
98 |
|
|
|
83 |
|
Other non-current liabilities |
|
|
5,203 |
|
|
|
|
4,397 |
|
|
|
|
6,279 |
|
|
|
5,305 |
|
Total liabilities |
|
|
88,024 |
|
|
|
|
74,364 |
|
|
|
|
87,300 |
|
|
|
73,752 |
|
Share capital |
|
|
3,474 |
|
|
|
|
2,935 |
|
|
|
|
3,474 |
|
|
|
2,935 |
|
Capital surplus |
|
|
27,110 |
|
|
|
|
22,903 |
|
|
|
|
27,099 |
|
|
|
22,894 |
|
Other components of equity |
|
|
(1,045 |
) |
|
|
|
(883 |
) |
|
|
|
2,037 |
|
|
|
1,721 |
|
Retained earnings |
|
|
147,371 |
|
|
|
|
124,500 |
|
|
|
|
212,053 |
|
|
|
179,144 |
|
Equity attributable to owners of the Parent Company |
|
|
176,910 |
|
|
|
|
149,455 |
|
|
|
|
244,663 |
|
|
|
206,694 |
|
Non-controlling interest |
|
|
438 |
|
|
|
|
370 |
|
|
|
|
771 |
|
|
|
651 |
|
Total equity |
|
|
177,348 |
|
|
|
|
149,825 |
|
|
|
|
245,434 |
|
|
|
207,345 |
|
Total liabilities and equity |
|
|
265,372 |
|
|
|
|
224,189 |
|
|
|
|
332,734 |
|
|
|
281,097 |
|
* For convenience purposes only, the KRW amounts
are expressed in U.S. dollars at the rate of KRW 1,183.70 to US$
1.00, the noon buying rate in effect on September 30, 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 |
|
|
Nine months ended |
|
|
|
30-Jun-21 |
|
|
30-Sep-20 |
|
|
30-Sep-21 |
|
|
30-Sep-20 |
|
30-Sep-21 |
|
|
|
(KRW) |
|
|
(KRW) |
|
|
(KRW) |
|
|
(US$) |
|
|
(KRW) |
|
|
(KRW) |
|
|
(US$) |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online games |
|
|
22,380 |
|
|
|
|
31,833 |
|
|
|
|
18,295 |
|
|
|
|
15,456 |
|
|
|
|
74,176 |
|
|
|
|
60,133 |
|
|
|
|
50,801 |
|
|
Mobile games |
|
|
55,140 |
|
|
|
|
95,531 |
|
|
|
|
106,218 |
|
|
|
|
89,734 |
|
|
|
|
205,762 |
|
|
|
|
243,796 |
|
|
|
|
205,961 |
|
|
Other revenue |
|
|
6,091 |
|
|
|
|
4,431 |
|
|
|
|
4,157 |
|
|
|
|
3,512 |
|
|
|
|
13,575 |
|
|
|
|
13,411 |
|
|
|
|
11,330 |
|
|
Total net revenue |
|
|
83,611 |
|
|
|
|
131,795 |
|
|
|
|
128,670 |
|
|
|
|
108,702 |
|
|
|
|
293,513 |
|
|
|
|
317,340 |
|
|
|
|
268,092 |
|
|
Cost of revenue |
|
|
45,842 |
|
|
|
|
74,107 |
|
|
|
|
66,146 |
|
|
|
|
55,881 |
|
|
|
|
174,079 |
|
|
|
|
169,541 |
|
|
|
|
143,230 |
|
|
Gross profit |
|
|
37,769 |
|
|
|
|
57,688 |
|
|
|
|
62,524 |
|
|
|
|
52,821 |
|
|
|
|
119,434 |
|
|
|
|
147,799 |
|
|
|
|
124,862 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
14,014 |
|
|
|
|
18,042 |
|
|
|
|
18,091 |
|
|
|
|
15,283 |
|
|
|
|
46,692 |
|
|
|
|
47,613 |
|
|
|
|
40,223 |
|
|
Research and development |
|
|
4,147 |
|
|
|
|
4,550 |
|
|
|
|
4,143 |
|
|
|
|
3,500 |
|
|
|
|
10,676 |
|
|
|
|
12,299 |
|
|
|
|
10,390 |
|
|
Others, net |
|
|
451 |
|
|
|
|
740 |
|
|
|
|
48 |
|
|
|
|
41 |
|
|
|
|
1,041 |
|
|
|
|
535 |
|
|
|
|
454 |
|
|
Total operating expenses |
|
|
18,612 |
|
|
|
|
23,332 |
|
|
|
|
22,282 |
|
|
|
|
18,824 |
|
|
|
|
58,409 |
|
|
|
|
60,447 |
|
|
|
|
51,067 |
|
|
Operating profit |
|
|
19,157 |
|
|
|
|
34,356 |
|
|
|
|
40,242 |
|
|
|
|
33,997 |
|
|
|
|
61,025 |
|
|
|
|
87,352 |
|
|
|
|
73,795 |
|
|
Finance income(costs): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income |
|
|
597 |
|
|
|
|
822 |
|
|
|
|
2,128 |
|
|
|
|
1,798 |
|
|
|
|
3,000 |
|
|
|
|
4,325 |
|
|
|
|
3,654 |
|
|
Finance costs |
|
|
(367 |
) |
|
|
|
(1,503 |
) |
|
|
|
(935 |
) |
|
|
|
(790 |
) |
|
|
|
(2,765 |
) |
|
|
|
(2,235 |
) |
|
|
|
(1,888 |
) |
|
Profit before income tax |
|
|
19,387 |
|
|
|
|
33,675 |
|
|
|
|
41,435 |
|
|
|
|
35,005 |
|
|
|
|
61,260 |
|
|
|
|
89,442 |
|
|
|
|
75,561 |
|
|
Income tax expenses |
|
|
4,569 |
|
|
|
|
8,390 |
|
|
|
|
15,151 |
|
|
|
|
12,800 |
|
|
|
|
13,687 |
|
|
|
|
24,779 |
|
|
|
|
20,933 |
|
|
Profit for the year |
|
|
14,818 |
|
|
|
|
25,285 |
|
|
|
|
26,284 |
|
|
|
|
22,205 |
|
|
|
|
47,573 |
|
|
|
|
64,663 |
|
|
|
|
54,628 |
|
|
Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest |
|
|
52 |
|
|
|
|
4 |
|
|
|
|
(67 |
) |
|
|
|
(57 |
) |
|
|
|
(66 |
) |
|
|
|
(19 |
) |
|
|
|
(16 |
) |
|
Owners of Parent company |
|
|
14,766 |
|
|
|
|
25,281 |
|
|
|
|
26,351 |
|
|
|
|
22,262 |
|
|
|
|
47,639 |
|
|
|
|
64,682 |
|
|
|
|
54,644 |
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and diluted |
|
|
2,125 |
|
|
|
|
3,638 |
|
|
|
|
3,792 |
|
|
|
|
3.20 |
|
|
|
|
6,856 |
|
|
|
|
9,308 |
|
|
|
|
7.86 |
|
|
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 |
|
|
Earnings per ADS(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and diluted |
|
|
2,125 |
|
|
|
|
3,638 |
|
|
|
|
3,792 |
|
|
|
|
3.20 |
|
|
|
|
6,856 |
|
|
|
|
9,308 |
|
|
|
|
7.86 |
|
|
* For convenience, the KRW amounts are expressed
in U.S. dollars at the rate of KRW 1,183.70 to US$1.00, the noon
buying rate in effect on September 30, 2021 as quoted by the
Federal Reserve Bank of New York.(1) Each ADS represents one common
share.
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