Seoul, South Korea – November 13, 2023 – 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, 2023, prepared in accordance with International
Financial Reporting Standards as issued by the International
Accounting Standards Board and business updates.
THIRD QUARTER 2023 HIGHLIGHTS
- Total revenues were KRW 176,145 million (US$ 130,685 thousand),
representing a 26.3% decrease from the second quarter ended June
30, 2023 (“QoQ”) and a 72.1% increase from the third quarter ended
September 30, 2022 (“YoY”).
- Operating profit was KRW 37,917 million (US$ 28,131 thousand),
representing a 28.1% decrease QoQ and a 78.3% increase YoY.
- Profit before income tax expenses was KRW 41,208 million (US$
30,572 thousand), representing a 25.2% decrease QoQ and a 68.8%
increase YoY.
- Net profit attributable to parent company was KRW 28,961
million (US$ 21,486 thousand), representing a 35.7% decrease QoQ
and an 80.2% increase YoY.
REVIEW OF THIRD QUARTER 2023 FINANCIAL
RESULTS
Revenues
Online game revenues for the third quarter of
2023 were KRW 17,316 million (US$ 12,847 thousand), representing an
1.7% increase QoQ from KRW 17,025 million and a 10.1% decrease YoY
from KRW 19,271 million. The increase QoQ was mainly attributable
to increased revenues from Ragnarok Online in Taiwan. Such increase
was partially offset by decreased revenue from Ragnarok Online in
Japan. The decrease YoY was largely due to decreased revenues from
Ragnarok Online in Taiwan, Korea, Philippines, Singapore and
Malaysia.
Mobile game revenues were KRW 155,467 million
(US$ 115,344 thousand) for the third quarter of 2023, representing
a 28.9% decrease QoQ from KRW 218,687 million and a 95.7% increase
YoY from KRW 79,443 million. The decrease QoQ was resulted by
decreased revenues from Ragnarok Origin in Southeast Asia, Taiwan,
Hong Kong and Macau and Ragnarok X: Next Generation in Korea. The
increase YoY was mainly due to initial revenue from Ragnarok Origin
in Southeast Asia launched in April 6,2023 and Ragnarok X: Next
Generation in Korea launched in January 5, 2023. This increase was
partially offset by decreased revenues from Ragnarok X: Next
Generation in Southeast Asia, Ragnarok Monster's Arena and Ragnarok
M: Eternal Love in Southeast Asia.
Other revenues were KRW 3,362 million (US$ 2,494
thousand) for the third quarter of 2023, representing a 5.7%
increase QoQ from KRW 3,182 million and an 8.2% decrease YoY from
KRW 3,663 million.
Cost of Revenue
Cost of revenue was KRW 117,834 million (US$
87,423 thousand) for the third quarter of 2023, representing a
30.0% decrease QoQ from KRW 168,309 million and a 97.0% increase
YoY from KRW 59,829 million. The decrease QoQ was mainly due to
decreased commission paid for mobile game services related to
Ragnarok Origin in Southeast Asia, Taiwan, Hong Kong and Macau and
Ragnarok X: Next Generation in Korea. The increase YoY was
primarily due to increased commission paid for mobile game services
related to Ragnarok Origin in Southeast Asia launched in April 6,
2023 and Ragnarok X: Next Generation in Korea launched in January
5, 2023.
Operating expenses
Operating expenses were KRW 20,394 million (US$
15,131 thousand) for the third quarter of 2023, representing a
14.0% increase QoQ from KRW 17,884 million and a 4.2% decrease YoY
from KRW 21,277 million. The increase QoQ was mainly due to
increased commission paid for payment gateway fees related to
Ragnarok Online in Taiwan, increased R&D expense and increased
advertising expenses for White Chord launched in Japan on August
29, 2023, Ragnarok Landverse launched in Southeast Asia (Thailand
and Indonesia excluded), Middle East, India, Africa and Oceania on
September 20, 2023 and Ragnarok 20 Heroes launched in Korea on
October 12, 2023. The decrease YoY was mainly due to decreased
advertising expenses for Ragnarok Monster's Arena in Thailand and
Korea, Ragnarok Origin in North America and Korea and Ragnarok
Online in Korea.
Profit Before Income Tax Expenses
Profit before income tax expenses was KRW 41,208
million (US$ 30,572 thousand) for the third quarter of 2023
compared with profit before income tax expense of KRW 55,097
million for the second quarter of 2023 and profit before income tax
expenses of KRW 24,410 million for the third quarter of 2022.
Net Profit
As a result of the foregoing factors, Gravity
recorded a net profit attributable to parent company of KRW 28,961
million (US$ 21,486 thousand) for the third quarter of 2023
compared with net profit attributable to parent company of KRW
45,016 million for the second quarter of 2023 and a net profit
attributable to parent company of KRW 16,076 million for the third
quarter of 2022.
Liquidity
The balance of cash and cash equivalents and
short-term financial instruments was KRW 443,835 million (US$
329,289 thousand) as of September 30, 2023.
Note: For convenience purposes only, the KRW amounts have been
expressed in U.S. dollars at the exchange rate of KRW 1,347.86 to
US$ 1.00, the noon buying rate in effect on September 30, 2023 as
quoted by the Federal Reserve Bank of New York.
GRAVITY BUSINESS UPDATES
Ragnarok Online IP-based Games
- Ragnarok Origin, an MMORPG mobile and PC game
Ragnarok Origin officially received a foreign
version number from Chinese government on August 29, 2023, and is
preparing to be launched in China in the first quarter of 2024.
Also, the global version of this game is being prepared to be
launched in Central, South America, etc. in the first quarter of
2024
- Ragnarok X: Next Generation, an MMORPG mobile and PC game
Ragnarok X: Next Generation is preparing to be
launched in China and the publisher of the game is Beihai Leyou
Technology Co. Ltd, an affiliate of ZLONGAME.
- Ragnarok Begins, an Action Side-scrolling MMORPG mobile and PC
game
Ragnarok Begins started its second CBT on November 1, 2023 and
is preparing to be launched in South Korea in December 2023.
- Ragnarok V: Returns, a 3D MMORPG mobile and PC game
Ragnarok V: Returns will open its second CBT in
South Korea and the first CBT in Thailand in the first half of
2024.
- Ragnarok 20 Heroes, an Action RPG mobile game
Ragnarok 20 Heroes launched in Korea on October 12, 2023.
Ragnarok Online IP-based Blockchain
Games
- Ragnarok Landverse, an MMORPG blockchain PC game
Ragnarok Landverse launched in Southeast Asia (Thailand and
Indonesia excluded), Middle East, India, Africa and Oceania on
September 20, 2023.
- Ragnarok Poring Merge NFT, a Time Effective RPG blockchain
mobile game
Ragnarok Poring Merge NFT is being prepared to
be launched in Global in the first quarter of 2024.
Other IP-based games
- Wetory, a 3D Action Adventure Rogue-Like PC and console
game
Wetory was released in global on October 26,
2023. The game was developed by PepperStons, a Korean game
developer. and published by Gravity.
Investor Presentation
Gravity issued an investor presentation. The
presentation contains the Company’s recent business updates,
results of the third quarter in 2023 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. 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, 2023 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 IR Unit Gravity Co., Ltd. Email: ir@gravity.co.kr
Telephone: +82-2-2132-7800
Ms. Yiseo Shin IR Assistant Manager Gravity Co., Ltd.
Email: ir@gravity.co.kr Telephone: +82-2-2132-7801
GRAVITY Co., Ltd.Consolidated
Statements of Financial Position
(In millions of KRW and thousands of US$)
|
|
As of |
|
|
31-Dec-22 |
|
|
30-Sep-23 |
|
|
KRW |
|
|
US$ |
|
|
KRW |
|
|
US$ |
|
|
(audited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
169,877 |
|
|
|
126,035 |
|
|
|
207,220 |
|
|
|
153,740 |
Short-term financial instruments |
|
|
167,000 |
|
|
|
123,900 |
|
|
|
236,615 |
|
|
|
175,549 |
Accounts receivable, net |
|
|
77,257 |
|
|
|
57,318 |
|
|
|
81,046 |
|
|
|
60,129 |
Other receivables, net |
|
|
140 |
|
|
|
104 |
|
|
|
232 |
|
|
|
172 |
Prepaid expenses |
|
|
3,332 |
|
|
|
2,472 |
|
|
|
2,990 |
|
|
|
2,218 |
Other current financial assets |
|
|
3,370 |
|
|
|
2,500 |
|
|
|
4,125 |
|
|
|
3,060 |
Other current assets |
|
|
791 |
|
|
|
587 |
|
|
|
5,749 |
|
|
|
4,265 |
Total current assets |
|
|
421,767 |
|
|
|
312,916 |
|
|
|
537,977 |
|
|
|
399,133 |
Property and equipment, net |
|
|
8,140 |
|
|
|
6,039 |
|
|
|
10,808 |
|
|
|
8,019 |
Intangible assets, net |
|
|
3,869 |
|
|
|
2,870 |
|
|
|
5,029 |
|
|
|
3,730 |
Deferred tax assets |
|
|
5,660 |
|
|
|
4,199 |
|
|
|
5,574 |
|
|
|
4,135 |
Other non-current financial assets |
|
|
2,176 |
|
|
|
1,614 |
|
|
|
1,741 |
|
|
|
1,292 |
Other non-current assets |
|
|
2,482 |
|
|
|
1,841 |
|
|
|
6,204 |
|
|
|
4,603 |
Total assets |
|
|
444,094 |
|
|
|
329,479 |
|
|
|
567,333 |
|
|
|
420,912 |
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
73,549 |
|
|
|
54,567 |
|
|
|
76,644 |
|
|
|
56,863 |
Deferred revenue |
|
|
18,543 |
|
|
|
13,757 |
|
|
|
15,976 |
|
|
|
11,853 |
Withholdings |
|
|
3,201 |
|
|
|
2,375 |
|
|
|
3,731 |
|
|
|
2,768 |
Accrued expense |
|
|
2,041 |
|
|
|
1,514 |
|
|
|
1,630 |
|
|
|
1,209 |
Income tax payable |
|
|
5,469 |
|
|
|
4,058 |
|
|
|
14,320 |
|
|
|
10,624 |
Other current liabilities |
|
|
2,907 |
|
|
|
2,157 |
|
|
|
4,197 |
|
|
|
3,114 |
Total current liabilities |
|
|
105,710 |
|
|
|
78,428 |
|
|
|
116,498 |
|
|
|
86,431 |
Long-term account payables |
|
|
374 |
|
|
|
277 |
|
|
|
74 |
|
|
|
55 |
Long-term deferred revenue |
|
|
30 |
|
|
|
22 |
|
|
|
381 |
|
|
|
283 |
Other non-current liabilities |
|
|
4,968 |
|
|
|
3,686 |
|
|
|
3,994 |
|
|
|
2,962 |
Deferred tax liabilities |
|
|
2,832 |
|
|
|
2,101 |
|
|
|
2,833 |
|
|
|
2,102 |
Total liabilities |
|
|
113,914 |
|
|
|
84,514 |
|
|
|
123,780 |
|
|
|
91,833 |
Share capital |
|
|
3,474 |
|
|
|
2,577 |
|
|
|
3,474 |
|
|
|
2,577 |
Capital surplus |
|
|
27,098 |
|
|
|
20,104 |
|
|
|
27,098 |
|
|
|
20,104 |
Other components of equity |
|
|
2,475 |
|
|
|
1,837 |
|
|
|
5,362 |
|
|
|
3,979 |
Retained earnings |
|
|
296,480 |
|
|
|
219,963 |
|
|
|
406,923 |
|
|
|
301,903 |
Equity attributable to owners of the Parent Company |
|
|
329,527 |
|
|
|
244,481 |
|
|
|
442,857 |
|
|
|
328,563 |
Non-controlling interest |
|
|
653 |
|
|
|
484 |
|
|
|
696 |
|
|
|
516 |
Total equity |
|
|
330,180 |
|
|
|
244,965 |
|
|
|
443,553 |
|
|
|
329,079 |
Total liabilities and equity |
|
|
444,094 |
|
|
|
329,479 |
|
|
|
567,333 |
|
|
|
420,912 |
* For convenience purposes only, the KRW amounts
are expressed in U.S. dollars at the rate of KRW 1,347.86 to US$
1.00, the noon buying rate in effect on September 30, 2023 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-23 |
30-Sep-22 |
30-Sep-23 |
|
30-Sep-22 |
|
30-Sep-23 |
|
|
(KRW) |
|
(KRW) |
|
(KRW) |
|
(US$) |
|
(KRW) |
|
(KRW) |
|
(US$) |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online games |
|
|
17,025 |
|
|
19,271 |
|
|
17,316 |
|
|
12,847 |
|
|
65,545 |
|
|
57,037 |
|
|
42,317 |
Mobile games |
|
|
218,687 |
|
|
79,443 |
|
|
155,467 |
|
|
115,344 |
|
|
210,726 |
|
|
513,148 |
|
|
380,714 |
Other revenue |
|
|
3,182 |
|
|
3,663 |
|
|
3,362 |
|
|
2,494 |
|
|
11,232 |
|
|
9,801 |
|
|
7,270 |
Total net revenue |
|
|
238,894 |
|
|
102,377 |
|
|
176,145 |
|
|
130,685 |
|
|
287,503 |
|
|
579,986 |
|
|
430,301 |
Cost of revenue |
|
|
168,309 |
|
|
59,829 |
|
|
117,834 |
|
|
87,423 |
|
|
155,658 |
|
|
391,628 |
|
|
290,555 |
Gross profit |
|
|
70,585 |
|
|
42,548 |
|
|
58,311 |
|
|
43,262 |
|
|
131,845 |
|
|
188,358 |
|
|
139,746 |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
15,029 |
|
|
17,624 |
|
|
17,190 |
|
|
12,754 |
|
|
56,473 |
|
|
45,490 |
|
|
33,750 |
Research and development |
|
|
2,852 |
|
|
3,745 |
|
|
3,964 |
|
|
2,941 |
|
|
9,933 |
|
|
9,738 |
|
|
7,225 |
Others, net |
|
|
3 |
|
|
(92) |
|
|
(760) |
|
|
(564) |
|
|
(263) |
|
|
(806) |
|
|
(598) |
Total operating expenses |
|
|
17,884 |
|
|
21,277 |
|
|
20,394 |
|
|
15,131 |
|
|
66,143 |
|
|
54,422 |
|
|
40,377 |
Operating profit |
|
|
52,701 |
|
|
21,271 |
|
|
37,917 |
|
|
28,131 |
|
|
65,702 |
|
|
133,936 |
|
|
99,369 |
Finance income(costs): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income |
|
|
4,213 |
|
|
5,343 |
|
|
7,059 |
|
|
5,237 |
|
|
11,051 |
|
|
16,733 |
|
|
12,415 |
Finance costs |
|
|
(1,817) |
|
|
(2,204) |
|
|
(3,768) |
|
|
(2,796) |
|
|
(5,249) |
|
|
(8,138) |
|
|
(6,038) |
Profit before income tax |
|
|
55,097 |
|
|
24,410 |
|
|
41,208 |
|
|
30,572 |
|
|
71,504 |
|
|
142,531 |
|
|
105,746 |
Income tax expense |
|
|
10,070 |
|
|
8,312 |
|
|
12,223 |
|
|
9,068 |
|
|
21,663 |
|
|
32,092 |
|
|
23,809 |
Profit for the year |
|
|
45,027 |
|
|
16,098 |
|
|
28,985 |
|
|
21,504 |
|
|
49,841 |
|
|
110,439 |
|
|
81,937 |
Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest |
|
|
11 |
|
|
22 |
|
|
24 |
|
|
18 |
|
|
(131) |
|
|
(4) |
|
|
(3) |
Owners of Parent company |
|
|
45,016 |
|
|
16,076 |
|
|
28,961 |
|
|
21,486 |
|
|
49,972 |
|
|
110,443 |
|
|
81,940 |
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and diluted |
|
|
6,478 |
|
|
2,313 |
|
|
4,168 |
|
|
3.09 |
|
|
7,191 |
|
|
15,894 |
|
|
11.79 |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and diluted |
|
|
6,478 |
|
|
2,313 |
|
|
4,168 |
|
|
3.09 |
|
|
7,191 |
|
|
15,894 |
|
|
11.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* For convenience, the KRW amounts are expressed in U.S. dollars
at the rate of KRW 1,347.86 to US$1.00, the noon buying rate in
effect on September 30, 2023 as quoted by the Federal Reserve Bank
of New York.(1) Each ADS represents one common share.
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