[THE INVESTOR] Korea’s top internet portal operator Naver said on Jan. 31 that its net profit fell more than 17 percent in 2018 from a year ago due to massive investments in advanced technologies such as artificial intelligence and autonomous driving.
The firm’s net profit came to 636.4 billion won (US$573 million), down from 770.1 billion won in 2017. Sales soared 19.4 percent to 5.59 trillion won, marking the first time that annual sales have topped the 5 trillion won milestone, the internet giant said.
However, operating income fell 20 percent to 942.5 billion won, ending a three-year streak of more than 1 trillion won operating income.
Naver headquarters in Seongnam, Gyeonggi Province
The company said it spent a significant amount in investments to push forward new businesses such as artificial intelligence and autonomous driving technology. It spent 4.64 trillion won for operating expenses in 2018, up 32.7 percent on-year.
Despite this, Naver said it will continue to invest preemptively in new technologies and talents.
“While the environment surrounding the online ecosystem is changing rapidly, competition across the borders is getting fierce. We will use this opportunity of change and continue to focus on preemptive investment in technologies,” Naver CEO Han Seong-sook said.
“We will focus on big businesses with potential and efficiently manage investments.”
In the fourth quarter of 2018, sales jumped 19.8 percent from the same period last year to 1.52 trillion won while net profit declined 22.9 percent on-year to 132.5 billion won.
Revenue from its platform business, including its messenger app Line, increased 7.9 percent on-year to 565.3 billion won in the fourth quarter. Revenue from its advertisement business was up 3.1 percent to 155.1 billion won during the same period.
Meanwhile, the company said in a public filing that it has decided to buy back 735,295 shares worth 100 billion won as part of its efforts to improve shareholder value.
Naver shares remained unchanged, closing at 136,000 won on Jan. 31 after giving up earlier gains of 5.5 percent. The benchmark KOSPI edged down 0.06 percent to 2,204.85 points.
By Park Ga-young (email@example.com