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[Alpha Biz=(Chicago) Reporter Kim Jisun] Naver is on the verge of surpassing KRW 10 trillion in annual sales. Search advertising has maintained solid growth and sales and operating profit have hit record highs as commerce and content sales have jumped sharply.
Naver plans to maximize profitability this year by actively utilizing AI technology to strengthen its service competitiveness.
Naver said its consolidated sales jumped 17.6% on-year to KRW 9.67 trillion last year. This is the first time that annual sales have exceeded KRW 9 trillion. Operating profit rose 14.1 percent to 1.4888 trillion won during the same period.
In particular, the adjustment 'EBITDA', which shows the actual cash generation capacity, also increased by 18.4%, reaching a record high of 2.1338 trillion won per year. This is due to the surplus conversion of webtoons and the expansion of profits of US used trading platform Forsymark.
In terms of sales by business sector last year, all businesses grew evenly. In particular, commerce and content led the performance, jumping 41.4% and 37.4% from a year ago.
Commerce posted 2.5466 trillion won in sales last year as the acquisition of Forcimark and the overall trading volume of smart stores grew. According to Naver, the number of smart stores increased from about 290,000 in 2019 to about 570,000 as of June last year.
Chinese shopping platforms such as Aliexpress and Temu, which can be competitors in Naver's commerce business, are rather an opportunity than a crisis. They say that a strategic advertising alliance with China's rapidly growing commerce in Korea could have a positive impact on Naver.
Naver intends to increase its competitiveness by experimentally using integrated data to provide core brand product recommendations in shopping services starting this year.
Content recorded 1.733 trillion won in sales last year thanks to the growth in sales of webtoon content and IP (Intellectual Property Rights) and increased sales of Snow AI products.
The Fin Tech and cloud sectors rose 14.2% and 11.0%, respectively, to 1.3548 trillion won and 447.2 billion won. Sales of search platforms (search ads) amounted to 3.5891 trillion won, up only 0.6% over the same period.
Shares jumped more than 9 percent on the day as Naver announced its positive performance. Naver closed at 221,500 won, up 9.38% from the previous day.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
