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Seoul, Korea, Nov. 14, 2022 (GLOBE NEWSWIRE) — 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
REVIEW OF THIRD QUARTER 2022 FINANCIAL RESULTS
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 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.
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.
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 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 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 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 is planned to be launched in Vietnam in the first half of 2023.
Ragnarok Labyrinth NFT was launched in global on September 22, 2022.
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.
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.
Gravity 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.
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.
Mr. Heung Gon Kim
Chief Financial Officer
Gravity Co., Ltd.
Ms. Somin Kim
Ms. Jeesun Lim
Gravity Co., Ltd.
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GRAVITY Co., Ltd.
Consolidated Statements of Financial Position
(In millions of KRW and thousands of US$)
|Cash and cash equivalents||99,105||69,223||107,684||75,216|
|Short-term financial instruments||148,000||103,376||186,000||129,918|
|Accounts receivable, net||52,615||36,751||78,855||55,079|
|Other receivables, net||1,080||754||227||159|
|Other current assets||2,171||1,516||2,448||1,710|
|Total current assets||306,135||213,830||378,080||264,084|
|Property and equipment, net||11,338||7,919||9,879||6,900|
|Intangible assets, net||3,342||2,334||3,468||2,422|
|Deferred tax assets||1,719||1,201||1,494||1,044|
|Other non-current financial assets||3,019||2,109||3,366||2,351|
|Other non-current assets||1,973||1,379||1,599||1,117|
|Liabilities and Equity|
|Income tax payable||10,629||7,424||4,272||2,984|
|Other current liabilities||3,608||2,520||3,587||2,505|
|Total current liabilities||73,997||51,686||89,090||62,228|
|Long-term deferred revenue||98||68||79||55|
|Other non-current liabilities||6,590||4,602||5,685||3,971|
|Other components of equity||2,180||1,523||8,440||5,895|
|Equity attributable to owners of the Parent Company||246,070||171,877||302,302||211,154|
|Total liabilities and equity||327,526||228,772||397,886||277,918|
* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,431.67 to US$ 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|
|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|
|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|
|Total operating expenses||23,829||22,282||21,277||14,862||60,447||66,143||46,200|
|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:|
|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.