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Kakao Pay achieves turnaround in annual earnings

By Lee Min-hyung mhlee@koreatimes.co.kr

Kakao Pay reported an annual net profit of 27.5 billion won ($21.87 million) for 2022, Tuesday, powered by financial revenue growth, marking the first earnings turnaround since its establishment.

But the company said its operating loss widened during the same period to 45.5 billion won, up 67.2 percent from the previous year, hit hard by a service blackout following a fire that broke out at its data center in October. In the fourth quarter alone, the company reported an operating loss of 22.2 billion won.

“Our earnings have been affected by an economic slowdown, market criticism [directed at management officials who cashed in on their stake holdings] following our initial public offering, and the data center fire,” Kakao Pay CEO Shin Wongeun said during a conference call. “All the members of Kakao Pay will identify such factors as an opportunity for us to reflect on our innovative growth.”

The mobile payment service operator also pledged to enhance profitability by diversifying its revenue streams in its advertising business.

“We use various ad banners for each of our financial services,” he said. “Kakao Pay will further sophisticate the ad business systems and focus more on generating revenues.”

The company also shared its plan to push for aggressive acquisitions in 2023 when a growing number of companies with growth potential will be put up for sale due to the global economic slump and prolonged high-interest rates, according to the leader of the company.

“More companies are expected to be up for sale this year at an undervalued price due to such economic factors,” he said. “We will keep seeking investment opportunities by utilizing our strong funding power.”

Kakao Pay is a subsidiary of Kakao, the operator of Korea’s dominant messenger app, KakaoTalk. The Kakao affiliate started its business in 2017, and has since rapidly grown to become one of Korea’s largest mobile payment service operators, with its 2022 transaction volume reaching 118 trillion won. The company went public in November 2021.

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2023-02-08T08:00:00.0000000Z

2023-02-08T08:00:00.0000000Z

https://thekoreatimes.pressreader.com/article/281582359786389

The Korea Times Co.