Seoul, South Korea – November 14, 2022 – 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 third quarter
ended September 30, 2022, prepared in accordance with International
Financial Reporting Standards as issued by the International
Accounting Standards Board and business updates.
THIRD QUARTER 2022 HIGHLIGHTS
- Total revenues were KRW 102,377 million (US$ 71,509 thousand),
representing an 6.1% increase from the second quarter ended June
30, 2022 (“QoQ”) and a 20.4% decrease from the third quarter ended
September 30, 2021 (“YoY”).
- Operating profit was KRW 21,271 million (US$ 14,857 thousand),
representing a 3.8% decrease QoQ and a 47.1% decrease YoY.
- Profit before income tax expenses was KRW 24,410 million (US$
17,050 thousand), representing a 2.2% increase QoQ and a 41.1%
decrease YoY.
- Net profit attributable to parent company was KRW 16,076
million (US$ 11,229 thousand), representing a 8.0% decrease QoQ and
a 39.0% decrease YoY.
REVIEW OF THIRD QUARTER 2022 FINANCIAL
RESULTS
Revenues
Online game revenues for the third quarter of
2022 were KRW 19,271 million (US$ 13,460 thousand), representing a
22.4% decrease QoQ from KRW 24,827 million and a 5.3% increase YoY
from KRW 18,295 million. The decrease QoQ was mainly attributable
to decreased revenues from Ragnarok Online in Taiwan and Thailand.
The increase YoY was largely due to increased revenues from
Ragnarok Online in Thailand and Korea. Such increase was partially
offset by decreased revenue from Ragnarok Online in Japan.
Mobile game revenues were KRW 79,443 million
(US$ 55,490 thousand) for the third quarter of 2022, representing a
16.8% increase QoQ from KRW 68,042 million and a 25.2% decrease YoY
from KRW 106,218 million. The increase QoQ resulted primarily
increased revenues from Ragnarok Origin, which was launched on
September 15, 2022, in Taiwan, Hong Kong and Macau. Such increase
was partially offset by decreased revenues from Ragnarok Labyrinth
NFT in Southeast Asia, Ragnarok X: Next Generation in Southeast
Asia and Taiwan, Ragnarok Origin in North America and Korea. The
decrease YoY was due to decrease revenues from Ragnarok X: Next
Generation in Southeast Asia and Ragnarok Origin in Japan and
Korea. This decrease was partially offset by increased revenues
from Ragnarok Origin in Taiwan, Hong Kong and Macau.
Other revenues were KRW 3,663 million (US$ 2,559
thousand) for the third quarter of 2022, representing a 0.4%
increase QoQ from KRW 3,650 million and a 11.9% decrease YoY from
KRW 4,157 million.
Cost of Revenue
Cost of revenue was KRW 59,829 million (US$
41,790 thousand) for the third quarter of 2022, representing a
18.3% increase QoQ from KRW 50,575 million and a 9.6% decrease YoY
from KRW 66,146 million. The increase QoQ was mainly due to
increased commission paid for mobile game services related to
Ragnarok Origin in Taiwan, Hong Kong and Macau. The decrease YoY
was primarily due to commission paid for mobile game services
related to Ragnarok X: Next Generation in Southeast Asia. Such
decrease was partially offset by increased commission paid for
mobile game service related to Ragnarok Origin in Taiwan, Hong
Kong and Macau.
Operating Expenses
Operating expenses were KRW 21,277 million (US$
14,862 thousand) for the third quarter of 2022, representing a
10.7% decrease QoQ from KRW 23,829 million and a 4.5% decrease YoY
from KRW 22,282 million. The decrease QoQ was mainly due to
decreased advertising expenses for Ragnarok Labyrinth NFT in global
and commission paid for payment gate way fees related to Ragnarok
Online in Taiwan and Thailand. The decrease YoY was mainly due to
decreased salaries and advertising expenses for Ragnarok: The Lost
Memories in Thailand.
Profit Before Income Tax Expenses
Profit before income tax expenses was KRW 24,410
million (US$ 17,050 thousand) for the third quarter of 2022
compared with profit before income tax expense of KRW 23,874
million for the second quarter of 2022 and profit before income tax
expenses of KRW 41,435 million for the third quarter of 2021.
Net Profit
As a result of the foregoing factors, Gravity
recorded a net profit attributable to parent company of KRW 16,076
million (US$ 11,229 thousand) for the third quarter of 2022
compared with net profit attributable to parent company of KRW
17,465 million for the second quarter of 2022 and a net profit
attributable to parent company of KRW 26,351 million for the third
quarter of 2021.
Liquidity
The balance of cash and cash equivalents and
short-term financial instruments was KRW 293,684 million (US$
205,134 thousand) as of September 30, 2022.Note: For convenience
purposes only, the KRW amounts have been expressed in U.S. dollars
at the exchange rate of KRW 1,431.67 to US$ 1.00, the noon buying
rate in effect on September 30, 2022 as quoted by the Federal
Reserve Bank of New York.
GRAVITY BUSINESS UPDATE
Ragnarok Online
Ragnarok Online has celebrated its 20th
anniversary in Korea in the second half of 2022 since the game was
initially launched in Korea on August 1, 2002. As celebrating its
20th anniversary, various kinds of online and offline events and
promotions were placed in the third quarter of 2022.
Ragnarok Online IP-based Games
- Ragnarok Origin, a MMORPG mobile and PC game
Ragnarok Origin was launched in multi-platform
including mobile and PC in Taiwan, Hong Kong and Macau in September
15, 2022. The game is scheduled to be launched in Southeast Asia in
the first half of 2023.
- Ragnarok X: Next Generation, a MMORPG mobile game
Ragnarok X: Next Generation has run the CBT in
Korea on October 11, 2022 and has started its pre-registration in
Korea on November 3, 2022. Ragnarok X: Next Generation is scheduled
to be launched in Korea in the first quarter of 2023.
- Ragnarok M: Eternal Love, a MMORPG mobile game
Ragnarok M: Eternal Love is planned to be
launched in Vietnam in the first half of 2023.
- Ragnarok Labyrinth NFT, a blockchain mobile game
Ragnarok Labyrinth NFT was launched in global on
September 22, 2022.
- Ragnarok Poring Merge, a blockchain mobile game
Ragnarok Poring Merge was designed as a
blockchain game based on P2E systems. The game is prepared to be
launched in Southeast Asia in the third quarter of 2023.
- Other Ragnarok Online IP-based games
Ragnarok: The Lost Memories, a Cinematic Newtro
Story RPG mobile and PC game, has launched in Korea on August 10,
2022. The game is planned to be launched in Taiwan, Hong Kong and
Macau in the first half of 2023.
Ragnarok Monster’s Arena, a Card SRPG mobile
game, was launched in Thailand on September 1, 2022. The game also
was launched in Korea on September 27, 2022. Ragnarok Monster’s
Arena is named differently in Thailand and Korea. The game is as
known as Ragnarok Tactics II in Thailand, and it is as known as
Ragnarok Arena in Korea. Ragnarok Monster’s Arena is scheduled to
be launched in Southeast Asia (except for Thailand), South Asia,
Middle East, and Oceania in the fourth quarter of 2022.
Ragnarok Begins, a MMORPG mobile and PC game,
has run the second CBT for mobile and PC game version in North
America on October 14, 2022. The game is scheduled to be launched
in North America in November 15, 2022. The game has been developed
by Gravity.
Ragnarok IP Game Jam with The Sandbox
Gravity initially signed a Ragnarok IP
partnership agreement with The Sandbox, a metaverse gaming
platform, on April 1, 2022. Gravity held the Ragnarok Game Jam with
The Sandbox on September 7, 2022.
Business Agreement with Me2On
Gravity Neocyon Inc., a subsidiary of Gravity,
has signed a business agreement with a mobile social casino game
company, Me2On, on October 14, 2022 and is planned to launch a
blockchain NFT game in the first half of 2023.
Investor PresentationGravity issued an
investor presentation. The presentation contains the Company’s
recent business updates, results of the third quarter in 2022 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 91 markets and regions. 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,
2021 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. Somin KimMs. Jeesun Lim 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$)
|
|
As of |
|
|
|
31-Dec-21 |
|
|
30-September-22 |
|
|
|
KRW |
|
|
US$ |
|
|
KRW |
|
|
US$ |
|
|
|
(audited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
99,105 |
|
|
|
69,223 |
|
|
|
107,684 |
|
|
|
75,216 |
|
Short-term financial instruments |
|
|
148,000 |
|
|
|
103,376 |
|
|
|
186,000 |
|
|
|
129,918 |
|
Accounts receivable, net |
|
|
52,615 |
|
|
|
36,751 |
|
|
|
78,855 |
|
|
|
55,079 |
|
Other receivables, net |
|
|
1,080 |
|
|
|
754 |
|
|
|
227 |
|
|
|
159 |
|
Prepaid expenses |
|
|
3,164 |
|
|
|
2,210 |
|
|
|
2,866 |
|
|
|
2,002 |
|
Other current assets |
|
|
2,171 |
|
|
|
1,516 |
|
|
|
2,448 |
|
|
|
1,710 |
|
Total current assets |
|
|
306,135 |
|
|
|
213,830 |
|
|
|
378,080 |
|
|
|
264,084 |
|
Property and equipment, net |
|
|
11,338 |
|
|
|
7,919 |
|
|
|
9,879 |
|
|
|
6,900 |
|
Intangible assets, net |
|
|
3,342 |
|
|
|
2,334 |
|
|
|
3,468 |
|
|
|
2,422 |
|
Deferred tax assets |
|
|
1,719 |
|
|
|
1,201 |
|
|
|
1,494 |
|
|
|
1,044 |
|
Other non-current financial assets |
|
|
3,019 |
|
|
|
2,109 |
|
|
|
3,366 |
|
|
|
2,351 |
|
Other non-current assets |
|
|
1,973 |
|
|
|
1,379 |
|
|
|
1,599 |
|
|
|
1,117 |
|
Total assets |
|
|
327,526 |
|
|
|
228,772 |
|
|
|
397,886 |
|
|
|
277,918 |
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
41,199 |
|
|
|
28,777 |
|
|
|
61,640 |
|
|
|
43,055 |
|
Deferred revenue |
|
|
13,481 |
|
|
|
9,416 |
|
|
|
15,512 |
|
|
|
10,835 |
|
Withholdings |
|
|
3,596 |
|
|
|
2,512 |
|
|
|
2,712 |
|
|
|
1,894 |
|
Accrued expense |
|
|
1,484 |
|
|
|
1,037 |
|
|
|
1,367 |
|
|
|
955 |
|
Income tax payable |
|
|
10,629 |
|
|
|
7,424 |
|
|
|
4,272 |
|
|
|
2,984 |
|
Other current liabilities |
|
|
3,608 |
|
|
|
2,520 |
|
|
|
3,587 |
|
|
|
2,505 |
|
Total current liabilities |
|
|
73,997 |
|
|
|
51,686 |
|
|
|
89,090 |
|
|
|
62,228 |
|
Long-term deferred revenue |
|
|
98 |
|
|
|
68 |
|
|
|
79 |
|
|
|
55 |
|
Other non-current liabilities |
|
|
6,590 |
|
|
|
4,602 |
|
|
|
5,685 |
|
|
|
3,971 |
|
Total liabilities |
|
|
80,685 |
|
|
|
56,356 |
|
|
|
94,854 |
|
|
|
66,254 |
|
Share capital |
|
|
3,474 |
|
|
|
2,427 |
|
|
|
3,474 |
|
|
|
2,427 |
|
Capital surplus |
|
|
27,098 |
|
|
|
18,928 |
|
|
|
27,098 |
|
|
|
18,928 |
|
Other components of equity |
|
|
2,180 |
|
|
|
1,523 |
|
|
|
8,440 |
|
|
|
5,895 |
|
Retained earnings |
|
|
213,318 |
|
|
|
148,999 |
|
|
|
263,290 |
|
|
|
183,904 |
|
Equity attributable to owners of the Parent
Company |
|
|
246,070 |
|
|
|
171,877 |
|
|
|
302,302 |
|
|
|
211,154 |
|
Non-controlling interest |
|
|
771 |
|
|
|
539 |
|
|
|
730 |
|
|
|
510 |
|
Total equity |
|
|
246,841 |
|
|
|
172,416 |
|
|
|
303,032 |
|
|
|
211,664 |
|
Total liabilities and equity |
|
|
327,526 |
|
|
|
228,772 |
|
|
|
397,886 |
|
|
|
277,918 |
|
* For convenience purposes only, the KRW amounts
are expressed in U.S. dollars at the rate of KRW 1,431.67 to US$
1.00, the noon buying rate in effect on September 30, 2022 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-22 |
|
|
30-Sep-21 |
|
|
30-Sep-22 |
|
|
30-Sep-21 |
|
|
30-Sep-22 |
|
|
|
(KRW) |
|
|
(KRW) |
|
|
(KRW) |
|
|
(US$) |
|
|
(KRW) |
|
|
(KRW) |
|
|
(US$) |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online games |
|
|
24,827 |
|
|
|
18,295 |
|
|
|
19,271 |
|
|
|
13,460 |
|
|
|
60,133 |
|
|
|
65,545 |
|
|
|
45,782 |
|
Mobile games |
|
|
68,042 |
|
|
|
106,218 |
|
|
|
79,443 |
|
|
|
55,490 |
|
|
|
243,796 |
|
|
|
210,726 |
|
|
|
147,189 |
|
Other revenue |
|
|
3,650 |
|
|
|
4,157 |
|
|
|
3,663 |
|
|
|
2,559 |
|
|
|
13,411 |
|
|
|
11,232 |
|
|
|
7,845 |
|
Total net revenue |
|
|
96,519 |
|
|
|
128,670 |
|
|
|
102,377 |
|
|
|
71,509 |
|
|
|
317,340 |
|
|
|
287,503 |
|
|
|
200,816 |
|
Cost of revenue |
|
|
50,575 |
|
|
|
66,146 |
|
|
|
59,829 |
|
|
|
41,790 |
|
|
|
169,541 |
|
|
|
155,658 |
|
|
|
108,725 |
|
Gross profit |
|
|
45,944 |
|
|
|
62,524 |
|
|
|
42,548 |
|
|
|
29,719 |
|
|
|
147,799 |
|
|
|
131,845 |
|
|
|
92,091 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
21,207 |
|
|
|
18,091 |
|
|
|
17,624 |
|
|
|
12,310 |
|
|
|
47,613 |
|
|
|
56,473 |
|
|
|
39,446 |
|
Research and development |
|
|
2,956 |
|
|
|
4,143 |
|
|
|
3,745 |
|
|
|
2,616 |
|
|
|
12,299 |
|
|
|
9,933 |
|
|
|
6,938 |
|
Others, net |
|
|
(334) |
|
|
|
48 |
|
|
|
(92) |
|
|
|
(64) |
|
|
|
535 |
|
|
|
(263) |
|
|
|
(184) |
|
Total operating expenses |
|
|
23,829 |
|
|
|
22,282 |
|
|
|
21,277 |
|
|
|
14,862 |
|
|
|
60,447 |
|
|
|
66,143 |
|
|
|
46,200 |
|
Operating profit |
|
|
22,115 |
|
|
|
40,242 |
|
|
|
21,271 |
|
|
|
14,857 |
|
|
|
87,352 |
|
|
|
65,702 |
|
|
|
45,891 |
|
Finance income(costs): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income |
|
|
4,100 |
|
|
|
2,128 |
|
|
|
5,343 |
|
|
|
3,732 |
|
|
|
4,325 |
|
|
|
11,051 |
|
|
|
7,719 |
|
Finance costs |
|
|
(2,341) |
|
|
|
(935) |
|
|
|
(2,204) |
|
|
|
(1,539) |
|
|
|
(2,235) |
|
|
|
(5,249) |
|
|
|
(3,666) |
|
Profit before income tax |
|
|
23,874 |
|
|
|
41,435 |
|
|
|
24,410 |
|
|
|
17,050 |
|
|
|
89,442 |
|
|
|
71,504 |
|
|
|
49,944 |
|
Income tax expense |
|
|
6,462 |
|
|
|
15,151 |
|
|
|
8,312 |
|
|
|
5,806 |
|
|
|
24,779 |
|
|
|
21,663 |
|
|
|
15,131 |
|
Profit for the year |
|
|
17,412 |
|
|
|
26,284 |
|
|
|
16,098 |
|
|
|
11,244 |
|
|
|
64,663 |
|
|
|
49,841 |
|
|
|
34,813 |
|
Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest |
|
|
(53) |
|
|
|
(67) |
|
|
|
22 |
|
|
|
15 |
|
|
|
(19) |
|
|
|
(131) |
|
|
|
(92) |
|
Owners of Parent company |
|
|
17,465 |
|
|
|
26,351 |
|
|
|
16,076 |
|
|
|
11,229 |
|
|
|
64,682 |
|
|
|
49,972 |
|
|
|
34,905 |
|
Earning per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and diluted |
|
|
2,513 |
|
|
|
3,792 |
|
|
|
2,313 |
|
|
|
1.62 |
|
|
|
9,308 |
|
|
|
7,191 |
|
|
|
5.02 |
|
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 |
|
|
2,513 |
|
|
|
3,792 |
|
|
|
2,313 |
|
|
|
1.62 |
|
|
|
9,308 |
|
|
|
7,191 |
|
|
|
5.02 |
|
* For convenience, the KRW amounts are expressed
in U.S. dollars at the rate of KRW 1,431.67 to US$1.00, the noon
buying rate in effect on September 30, 2022 as quoted by the
Federal Reserve Bank of New York.(1) Each ADS represents one common
share.
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