Gravity Reports Second Quarter of 2021 Results and Business Update
GRAVITY Co., Ltd. (NasdaqGM: GRVY) announced its second quarter 2021 financial results, reporting total revenues of KRW 83,611 million (US$ 73,965 thousand), a 20.4% decrease QoQ and 5.5% YoY. Operating profit was KRW 19,157 million (US$ 16,947 thousand), a 31.5% QoQ decline but a 17.4% YoY increase. Net profit attributable to the parent company dropped 37.3% QoQ to KRW 14,766 million (US$ 13,062 thousand), despite a 12.8% YoY increase. Key developments include the launch of Ragnarok Online in Vietnam and continued performance of Ragnarok X: Next Generation.
- Operating profit increased 17.4% YoY.
- Net profit attributable to parent increased 12.8% YoY.
- Ragnarok Origin launched in Japan, ranking first in downloads.
- Total revenues decreased 20.4% QoQ.
- Mobile game revenues dropped 33.1% QoQ.
- Net profit decreased 37.3% QoQ.
Seoul, South Korea, Aug. 13, 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 second quarter ended June 30, 2021, prepared in accordance with international Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.
SECOND QUARTER 2021 HIGHLIGHTS
- Total revenues were KRW 83,611 million (US
$ 73,965 thousand ), representing a20.4% decrease from the first quarter ended March 31, 2021 (“QoQ”) and a5.5% decrease from the second quarter ended June 30, 2020 (“YoY”). - Operating profit was KRW 19,157 million (US
$ 16,947 thousand ), representing a31.5% decrease QoQ and a17.4% increase YoY. - Profit before income tax expenses was KRW 19,387 million (US
$ 17,150 thousand ), representing a32.3% decrease QoQ and a18.7% increase YoY. - Net profit attributable to parent company was KRW 14,766 million (US
$ 13,062 thousand ), representing a37.3% decrease QoQ and a12.8% increase YoY.
REVIEW OF SECOND QUARTER 2021 FINANCIAL RESULTS
Revenues
Online game revenues for the second quarter of 2021 were KRW 22,380 million (US
Mobile game revenues were KRW 55,140 million (US
Other revenues were KRW 6,091 million (US
Cost of Revenue
Cost of revenue was KRW 45,842 million (US
Operating Expenses
Operating expenses were KRW 18,612 million (US
Profit before income tax expenses
Profit before income tax expenses was KRW 19,387 million (US
Net Profit
As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 14,766 million (US
Liquidity
The balance of cash and cash equivalents and short-term financial instruments was KRW 202,631 million (US
Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,130.42 to US
GRAVITY BUSINESS UPDATE
Ragnarok Online
Gravity opened Ragnarok Online in Vietnam on July 8, 2021 with VTC Technology and Digital Content Company as a joint publisher.
Ragnarok Online IP-based Games
- Ragnarok Origin, a MMORPG mobile game
Ragnarok Origin was launched in Japan on June 28, 2021 and ranked as the first in free download of Google Play games and Apple’s App Store games after its launching. The game is scheduled to be launched in the United States and Canada in October 2021 and in Taiwan, Hong Kong and Macau in the first half of 2022.
- Ragnarok X: Next Generation, a MMORPG mobile game
Ragnarok X: Next Generation was launched in Southeast Asia on June 18, 2021 and ranked as the first in top grossing of Apple App Store in Thailand, Indonesia and the Philippines. The game is being prepared for launch in Vietnam in September 2021 and in Korea in the first half of 2022.
- Other Ragnarok Online IP-based games
Ragnarok Project S (Tentative title), a MMORPG mobile game, is scheduled to be launched in Oceania in the fourth quarter of 2021 and has been developed by Gravity NeoCyon, Inc., our subsidiary in Korea.
Ragnarok The Lost Memories, a Cinematic Newtro Story RPG mobile game, is expected to be launched in Thailand in the third quarter of 2021 and in North America in the fourth quarter of 2021. Gravity NeoCyon, Inc., our subsidiary in Korea, has developed the game.
Ragnarok Begins, a MMORPG PC game, is expected to start the first closed beta test(“CBT”) in September 2021 and the launching schedule will be disclosed in G-STAR 2021. The game has been developed by Gravity.
Other IP games
NBA RISE TO STARDOM, a Sports mobile game, is scheduled to run the CBT in September 2021 and is expected to be launched in Japan in the fourth quarter of 2021. Both mobile platforms, iOS and Android, will be available for the game.
Sadako M, an Adventure mobile game, is expected to be launched in Japan in September 2021.
Investor Presentation
Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of the second 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 91 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
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GRAVITY Co., Ltd.
Consolidated Statements of Financial Position
(In millions of KRW and thousands of US$)
As of | ||||||||||||||||||
31-Dec-20 | 30-June-21 | |||||||||||||||||
KRW | US$ | KRW | US$ | |||||||||||||||
(audited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
Assets | ||||||||||||||||||
Current assets: | ||||||||||||||||||
Cash and cash equivalents | 110,632 | 97,868 | 101,631 | 89,906 | ||||||||||||||
Short-term financial instruments | 71,000 | 62,809 | 101,000 | 89,347 | ||||||||||||||
Accounts receivable, net | 59,761 | 52,866 | 58,874 | 52,082 | ||||||||||||||
Other receivables, net | 8 | 7 | 60 | 53 | ||||||||||||||
Prepaid expenses | 2,238 | 1,980 | 1,946 | 1,721 | ||||||||||||||
Other current assets | 2,946 | 2,606 | 2,301 | 2,035 | ||||||||||||||
Total current assets | 246,585 | 218,136 | 265,812 | 235,144 | ||||||||||||||
Property and equipment, net | 7,695 | 6,807 | 9,459 | 8,368 | ||||||||||||||
Intangible assets, net | 3,363 | 2,975 | 3,788 | 3,351 | ||||||||||||||
Deferred tax assets | 3,590 | 3,176 | 3,072 | 2,718 | ||||||||||||||
Other non-current financial assets | 1,324 | 1,171 | 2,071 | 1,832 | ||||||||||||||
Other non-current assets | 2,815 | 2,490 | 1,844 | 1,631 | ||||||||||||||
Total assets | 265,372 | 234,755 | 286,046 | 253,044 | ||||||||||||||
Liabilities and Equity | ||||||||||||||||||
Current liabilities: | ||||||||||||||||||
Accounts payable | 52,688 | 46,609 | 40,271 | 35,625 | ||||||||||||||
Deferred revenue | 13,692 | 12,112 | 12,030 | 10,642 | ||||||||||||||
Withholdings | 2,851 | 2,522 | 2,680 | 2,371 | ||||||||||||||
Accrued expense | 1,365 | 1,208 | 1,219 | 1,078 | ||||||||||||||
Income tax payable | 9,470 | 8,377 | 4,273 | 3,780 | ||||||||||||||
Other current liabilities | 2,654 | 2,348 | 2,567 | 2,271 | ||||||||||||||
Total current liabilities | 82,720 | 73,176 | 63,040 | 55,767 | ||||||||||||||
Long-term deferred revenue | 101 | 89 | 98 | 87 | ||||||||||||||
Other non-current liabilities | 5,203 | 4,604 | 5,782 | 5,114 | ||||||||||||||
Total liabilities | 88,024 | 77,869 | 68,920 | 60,968 | ||||||||||||||
Share capital | 3,474 | 3,073 | 3,474 | 3,073 | ||||||||||||||
Capital surplus | 27,110 | 23,982 | 27,110 | 23,982 | ||||||||||||||
Other components of equity | (1,045 | ) | (924 | ) | 11 | 10 | ||||||||||||
Retained earnings | 147,371 | 130,368 | 185,702 | 164,277 | ||||||||||||||
Equity attributable to owners of the Parent Company | 176,910 | 156,499 | 216,297 | 191,342 | ||||||||||||||
Non-controlling interest | 438 | 387 | 829 | 734 | ||||||||||||||
Total equity | 177,348 | 156,886 | 217,126 | 192,076 | ||||||||||||||
Total liabilities and equity | 265,372 | 234,755 | 286,046 | 253,044 |
* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,130.42 to US
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 | Six months ended | ||||||||||||||||||||||||||||||||||
31-Mar-21 | 30-Jun-20 | 30-Jun-21 | 30-Jun-20 | 30-Jun-21 | |||||||||||||||||||||||||||||||
(KRW) | (KRW) | (KRW) | (US$) | (KRW) | (KRW) | (US$) | |||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Online games | 19,458 | 28,907 | 22,380 | 19,798 | 42,343 | 41,838 | 37,011 | ||||||||||||||||||||||||||||
Mobile games | 82,438 | 54,249 | 55,140 | 48,778 | 110,231 | 137,578 | 121,705 | ||||||||||||||||||||||||||||
Other revenue | 3,163 | 5,302 | 6,091 | 5,389 | 9,144 | 9,254 | 8,187 | ||||||||||||||||||||||||||||
Total net revenue | 105,059 | 88,458 | 83,611 | 73,965 | 161,718 | 188,670 | 166,903 | ||||||||||||||||||||||||||||
Cost of revenue | 57,553 | 51,098 | 45,842 | 40,554 | 99,972 | 103,395 | 91,467 | ||||||||||||||||||||||||||||
Gross profit | 47,506 | 37,360 | 37,769 | 33,411 | 61,746 | 85,275 | 75,436 | ||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 15,508 | 17,643 | 14,014 | 12,397 | 28,650 | 29,522 | 26,116 | ||||||||||||||||||||||||||||
Research and development | 4,009 | 3,254 | 4,147 | 3,669 | 6,126 | 8,156 | 7,215 | ||||||||||||||||||||||||||||
Others, net | 36 | 150 | 451 | 398 | 301 | 487 | 430 | ||||||||||||||||||||||||||||
Total operating expenses | 19,553 | 21,047 | 18,612 | 16,464 | 35,077 | 38,165 | 33,761 | ||||||||||||||||||||||||||||
Operating profit | 27,953 | 16,313 | 19,157 | 16,947 | 26,669 | 47,110 | 41,675 | ||||||||||||||||||||||||||||
Finance income(costs): | |||||||||||||||||||||||||||||||||||
Finance income | 1,600 | 627 | 597 | 528 | 2,178 | 2,197 | 1,943 | ||||||||||||||||||||||||||||
Finance costs | (933 | ) | (605 | ) | (367 | ) | (325 | ) | (1,262 | ) | (1,300 | ) | (1,150 | ) | |||||||||||||||||||||
Profit before income tax | 28,620 | 16,335 | 19,387 | 17,150 | 27,585 | 48,007 | 42,468 | ||||||||||||||||||||||||||||
Income tax expense | 5,059 | 3,293 | 4,569 | 4,042 | 5,297 | 9,628 | 8,517 | ||||||||||||||||||||||||||||
Profit for the year | 23,561 | 13,042 | 14,818 | 13,108 | 22,288 | 38,379 | 33,951 | ||||||||||||||||||||||||||||
Profit attributable to: | |||||||||||||||||||||||||||||||||||
Non-controlling interest | (4 | ) | (53 | ) | 52 | 46 | (70 | ) | 48 | 42 | |||||||||||||||||||||||||
Owners of Parent company | 23,565 | 13,095 | 14,766 | 13,062 | 22,358 | 38,331 | 33,909 | ||||||||||||||||||||||||||||
Earning per share | |||||||||||||||||||||||||||||||||||
- Basic and diluted | 3,391 | 1,884 | 2,125 | 1.88 | 3,217 | 5,516 | 4.88 | ||||||||||||||||||||||||||||
Weighted average number of shares outstanding | |||||||||||||||||||||||||||||||||||
- Basic and diluted | 6,498,000 | 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 | 3,391 | 1,884 | 2,125 | 1.88 | 3,217 | 5,516 | 4.88 |
* For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,130.42 to US
(1) Each ADS represents one common share.
FAQ
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