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(Photo = Yonhap news) |
[Alpha Biz= Reporter Paul Lee] Kakao, which has expanded its business through massive mergers and acquisitions (M & A), is facing a backlash. Last year alone, it damaged 1.4 trillion won worth of Goodwill. Goodwill refers to a kind of 'premium' (management premium, etc.) paid more than the company's net asset value in the process of acquiring or merging another company.
According to the financial investment industry on March 3, Kakao damaged 1.4833 trillion won of Goodwill last year. Kakao conducts an Goodwill damage test every year and recognizes asset impairment loss as an immediate cost. Kakao's goodwill asset impairment loss in 2022 was 700 billion won. Kakao's Goodwill damage is more than SK (448.6 billion won), which aggressively proceeds with M & A and expanded its business.
Last year, most of Kakao's Goodwill asset impairment losss occurred in SM Entertainment, Tapas Entertainment, Lionheart and Melon. Specifically, SM Entertainment Goodwill asset impairment loss of Kakao and Kakao Entertainment reached 283 billion won. Kakao Entertainment processed a total of 924.4 billion won in Goodwill, with 459.7 billion won in Tapas and 231.3 billion won in melon. Kakao Games had 142.9 billion won in Goodwill asset impairment loss at Lion Heart Studio alone out of a total of 184.3 billion won in Goodwill damage. Kakao Mobility also processed 51.4 billion won worth of business rights as asset impairment loss.
Kakao posted a net loss of 1.816 trillion won last year, even though it posted consolidated sales of 7.557 trillion won. Operating profit also recorded 460.8 billion won, lower than the market forecast (475.1 billion won).
Kakao's affiliates are also in the process of liquidating companies that they have established or acquired. Kakao Entertainment is in the process of liquidating Thai-based content production and supplier studio Phoenix, Studio Orange and Cross-Comix India subsidiary as well as Kakao Entertainment Asia corporation. Crosscomics, which invested 200 million won in the acquisition and 4 billion won in paid-in capital increase, has already been liquidated.
In addition, the drama production company Cradle Studio, which was acquired in 2021, is scheduled to be liquidated, and it has been confirmed that the liquidation of Cross Pictures, which produced the Japanese version of the drama Itaewon Class, is under consideration. Kakao Games liquidated Life M.O., which was founded in 2019.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
