Seoul, Korea, May 14, 2021 (GLOBE NEWSWIRE) -- 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 first quarter ended March 31, 2021, prepared in accordance with international Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.
FIRST QUARTER 2021 HIGHLIGHTS
- Total revenues were KRW 105,059 million (US$ 93,243 thousand), representing a 6.6% decrease from the fourth quarter ended December 31, 2020 (“QoQ”) and a 43.4% increase from the first quarter ended March 31, 2020 (“YoY”).
- Operating profit was KRW 27,953 million (US$ 24,809 thousand), representing a 2.2% increase QoQ and a 169.9% increase YoY.
- Profit before income tax expenses was KRW 28,620 million (US$ 25,401 thousand), representing a 7.0% increase QoQ and a 154.4% increase YoY.
- Net profit attributable to parent company was KRW 23,565 million (US$ 20,915 thousand), representing a 56.4% increase QoQ and a 154.4% increase YoY.
REVIEW OF FIRST QUARTER 2021 FINANCIAL RESULTS
Revenues
Online game revenues for the first quarter of 2021 were KRW 19,458 million (US$ 17,270 thousand), representing a 26.6 % increase QoQ from KRW 15,370 million and a 44.8% increase YoY from KRW 13,436 million. The increase QoQ was mainly attributable to increased revenues from Ragnarok Online in Taiwan and Japan. The increase YoY was largely due to increased revenues from Ragnarok Online in Thailand and Japan.
Mobile game revenues were KRW 82,438 million (US$ 73,166 thousand) for the first quarter of 2021, representing a 10.9% decrease QoQ from KRW 92,562 million and a 47.3% increase YoY from KRW 55,982 million. The decrease QoQ resulted primarily from decreased revenues from Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and Ragnarok Origin in Korea. Such decrease was partially offset by increased revenues from Tera Classic in Japan that was launched on January 29, 2021 and Ragnarok M: Eternal Love in Southeast Asia. The increase YoY was primarily due to revenues from Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and Ragnarok Origin in Korea. This increase was partially offset by decreased revenues from Ragnarok M: Eternal Love in Taiwan, Southeast Asia, North America, Japan, Korea and Europe and Ragnarok Tactics.
Other revenues were KRW 3,163 million (US$ 2,807 thousand) for the first quarter of 2021, representing 29.8% decrease QoQ from KRW 4,508 million and an 17.7% decrease YoY from KRW 3,842 million.
Cost of Revenue
Cost of revenue was KRW 57,553 million (US$ 51,080 thousand) for the first quarter of 2021, representing a 11.4% decrease QoQ from KRW 64,966 million and a 17.8% increase YoY from KRW 48,874 million. The decrease QoQ was mainly due to decreased commission paid for mobile game services related to Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and Ragnarok Origin in Korea. The increase YoY was mostly from increased commission paid for mobile game services related to Ragnarok X: Next Generation in Taiwan, Hong Kong and Macau and Ragnarok Origin in Korea.
Operating Expenses
Operating expenses were KRW 19,553 million (US$ 17,354 thousand) for the first quarter of 2021, representing a 2.9% decrease QoQ from KRW 20,131 million and a 39.4% increase YoY from KRW 14,030 million. The decrease QoQ was mainly attributable to decreased advertising expenses for Ragnarok Origin in Korea and The Labyrinth of Ragnarok in Southeast Asia, and research and development expenses. The increase YoY was mostly resulted from increased advertising expenses for Tera Classic in Japan, The Labyrinth of Ragnarok in global and The Lord in Thailand, research and development expenses and commission paid.
Profit Before Income Tax Expenses
Profit before income tax expenses was KRW 28,620 million (US$ 25,401 thousand) for the first quarter of 2021 compared with profit before income tax expense of KRW 26,751 million for the fourth quarter of 2020 and profit before income tax expenses of KRW 11,250 million for the first quarter of 2020.
Net Profit
As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 23,565 million (US$ 20,915 thousand) for the first quarter of 2021 compared with net profit attributable to parent company of KRW 15,064 million for the fourth quarter of 2020 and a net profit attributable to parent company of KRW 9,263 million for the first quarter of 2020.
Liquidity
The balance of cash and cash equivalents and short-term financial instruments was KRW 194,754 million (US$ 172,850 thousand) as of March 31, 2021.
Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,126.72 to US$ 1.00, the noon buying rate in effect on March 31, 2021 as quoted by the Federal Reserve Bank of New York.
GRAVITY BUSINESS UPDATE
Ragnarok Online IP-based Games
- Ragnarok Origin, a MMORPG mobile game
Ragnarok Origin is being prepared for launch in Japan in the second quarter of 2021. The closed beta test (“CBT”) has completed on April 22 with users’ positive feedbacks.
- Ragnarok X: Next Generation, a MMORPG mobile game
Ragnarok X: Next Generation has started the CBT and pre-registration on April 23, 2021. The game is being prepared for launch in Southeast Asia in June 2021.
- The Labyrinth of Ragnarok, a Time Effective MMORPG mobile game
The Labyrinth of Ragnarok was launched in global including Korea (except Taiwan, Hong Kong, Macau, China and Japan) on March 23, 2021.
- Ragnarok: Poring Merge, a Time Effective RPG
Ragnarok: Poring Merge was launched in global on April 12, 2021.
- Other Ragnarok Online IP-based games
The Lost Memories: a Song of Valkyrie, a Story RPG mobile game, is expected to be launched in Thailand, North America and global in the second half of 2021. The game was developed by Gravity NeoCyon, Inc., our subsidiary in Korea.
Project S (Tentative title), a MMORPG mobile game, is scheduled to start the CBT in the second half of 2021.
Other IP games
The Lord, a SRPG mobile game, is expected to be launched in Indonesia, Vietnam, Taiwan, Hong Kong and Macau in the second half of 2021.
CPBL Pro-baseball 2021, a Sports mobile game, will be launched in Taiwan, Hong Kong and Macau on June 17, 2021.
Investor Presentation
Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of the first quarter in 2021 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 93 markets and countries. For more information about Gravity, please visit http://www.gravity.co.kr.
Forward-Looking Statements:
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, 2020 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.
Contact:
Mr. Heung Gon Kim
Chief Financial Officer
Gravity Co., Ltd.
Email: kheung@gravity.co.kr
Ms. Jin Lee
Ms. Hye Ji An
IR Unit
Gravity Co., Ltd.
Email: ir@gravity.co.kr
Telephone: +82-2-2132-7800
# # #
GRAVITY Co., Ltd.
Consolidated Statements of Financial Position
(In millions of KRW and thousands of US$)
| As of | ||||||||||||||||||
| 31-Dec-20 | 31-Mar-21 | |||||||||||||||||
| KRW | US$ | KRW | US$ | |||||||||||||||
| (audited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
| Assets | ||||||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash and cash equivalents | 110,632 | 98,189 | 116,754 | 103,623 | ||||||||||||||
| Short-term financial instruments | 71,000 | 63,015 | 78,000 | 69,227 | ||||||||||||||
| Accounts receivable, net | 59,761 | 53,040 | 62,994 | 55,909 | ||||||||||||||
| Other receivables, net | 8 | 7 | 183 | 162 | ||||||||||||||
| Prepaid expenses | 2,238 | 1,986 | 1,989 | 1,765 | ||||||||||||||
| Other current assets | 2,946 | 2,615 | 3,220 | 2,859 | ||||||||||||||
| Total current assets | 246,585 | 218,852 | 263,140 | 233,545 | ||||||||||||||
| Property and equipment, net | 7,695 | 6,830 | 8,286 | 7,354 | ||||||||||||||
| Intangible assets, net | 3,363 | 2,985 | 3,746 | 3,325 | ||||||||||||||
| Deferred tax assets | 3,590 | 3,186 | 2,810 | 2,494 | ||||||||||||||
| Other non-current financial assets | 1,324 | 1,175 | 2,070 | 1,837 | ||||||||||||||
| Other non-current assets | 2,815 | 2,498 | 1,916 | 1,701 | ||||||||||||||
| Total assets | 265,372 | 235,526 | 281,968 | 250,256 | ||||||||||||||
| Liabilities and Equity | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Accounts payable | 52,688 | 46,762 | 47,651 | 42,292 | ||||||||||||||
| Deferred revenue | 13,692 | 12,152 | 11,902 | 10,563 | ||||||||||||||
| Withholdings | 2,851 | 2,530 | 2,991 | 2,655 | ||||||||||||||
| Accrued expense | 1,365 | 1,211 | 1,261 | 1,119 | ||||||||||||||
| Income tax payable | 9,470 | 8,405 | 8,575 | 7,611 | ||||||||||||||
| Other current liabilities | 2,654 | 2,356 | 2,745 | 2,436 | ||||||||||||||
| Total current liabilities | 82,720 | 73,416 | 75,125 | 66,676 | ||||||||||||||
| Long-term deferred revenue | 101 | 90 | 185 | 164 | ||||||||||||||
| Other non-current liabilities | 5,203 | 4,618 | 4,593 | 4,077 | ||||||||||||||
| Total liabilities | 88,024 | 78,124 | 79,903 | 70,917 | ||||||||||||||
| Share capital | 3,474 | 3,083 | 3,474 | 3,083 | ||||||||||||||
| Capital surplus | 27,110 | 24,061 | 27,110 | 24,061 | ||||||||||||||
| Other components of equity | (1,045 | ) | (927 | ) | 112 | 99 | ||||||||||||
| Retained earnings | 147,371 | 130,796 | 170,936 | 151,711 | ||||||||||||||
| Equity attributable to owners of the Parent Company | 176,910 | 157,013 | 201,632 | 178,954 | ||||||||||||||
| Non-controlling interest | 438 | 389 | 433 | 385 | ||||||||||||||
| Total equity | 177,348 | 157,402 | 202,065 | 179,339 | ||||||||||||||
| Total liabilities and equity | 265,372 | 235,526 | 281,968 | 250,256 | ||||||||||||||
* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,126.72 to US$ 1.00, the noon buying rate in effect on March 31, 2021 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 | ||||||||||||||||||||||||||||||
| 31-Dec-20 | 31-Mar-20 | 31-Mar-21 | ||||||||||||||||||||||||||||
| (KRW) | (US$) | (KRW) | (US$) | (KRW) | (US$) | |||||||||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||
| Online games | 15,370 | 13,641 | 13,436 | 11,925 | 19,458 | 17,270 | ||||||||||||||||||||||||
| Mobile games | 92,562 | 82,152 | 55,982 | 49,686 | 82,438 | 73,166 | ||||||||||||||||||||||||
| Other revenue | 4,508 | 4,001 | 3,842 | 3,410 | 3,163 | 2,807 | ||||||||||||||||||||||||
| Total net revenue | 112,440 | 99,794 | 73,260 | 65,021 | 105,059 | 93,243 | ||||||||||||||||||||||||
| Cost of revenue | 64,966 | 57,659 | 48,874 | 43,377 | 57,553 | 51,080 | ||||||||||||||||||||||||
| Gross profit | 47,474 | 42,135 | 24,386 | 21,644 | 47,506 | 42,163 | ||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 15,708 | 13,941 | 11,007 | 9,769 | 15,508 | 13,764 | ||||||||||||||||||||||||
| Research and development | 4,358 | 3,868 | 2,872 | 2,549 | 4,009 | 3,558 | ||||||||||||||||||||||||
| Others, net | 65 | 58 | 151 | 134 | 36 | 32 | ||||||||||||||||||||||||
| Total operating expenses | 20,131 | 17,867 | 14,030 | 12,452 | 19,553 | 17,354 | ||||||||||||||||||||||||
| Operating profit | 27,343 | 24,268 | 10,356 | 9,192 | 27,953 | 24,809 | ||||||||||||||||||||||||
| Finance income(costs): | ||||||||||||||||||||||||||||||
| Finance income | 476 | 422 | 1,551 | 1,377 | 1,600 | 1,420 | ||||||||||||||||||||||||
| Finance costs | (1,068 | ) | (947 | ) | (657 | ) | (583 | ) | (933 | ) | (828 | ) | ||||||||||||||||||
| Profit before income tax | 26,751 | 23,743 | 11,250 | 9,986 | 28,620 | 25,401 | ||||||||||||||||||||||||
| Income tax expense | 11,768 | 10,444 | 2,004 | 1,779 | 5,059 | 4,490 | ||||||||||||||||||||||||
| Profit for the year | 14,983 | 13,299 | 9,246 | 8,207 | 23,561 | 20,911 | ||||||||||||||||||||||||
| Profit attributable to: | ||||||||||||||||||||||||||||||
| Non-controlling interest | (81 | ) | (71 | ) | (17 | ) | (15 | ) | (4 | ) | (4 | ) | ||||||||||||||||||
| Owners of Parent company | 15,064 | 13,370 | 9,263 | 8,222 | 23,565 | 20,915 | ||||||||||||||||||||||||
| Earning per share | ||||||||||||||||||||||||||||||
| - Basic and diluted | 2,168 | 1.92 | 1,333 | 1.18 | 3,391 | 3.01 | ||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||
| Earning per ADS(1) | ||||||||||||||||||||||||||||||
| - Basic and diluted | 2,168 | 1.92 | 1,333 | 1.18 | 3,391 | 3.01 | ||||||||||||||||||||||||
* For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,126.72 to US$1.00, the noon buying rate in effect on March 31, 2021 as quoted by the Federal Reserve Bank of New York.
(1) Each ADS represents one common share.