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SEOUL — South Korean internet giant Naver reported Thursday a group net profit of 90.7 billion won ($76 million) for the quarter ended in June, soaring by more than triple on the year thanks to the robust cloud computing business.
Naver’s IT platform business, which includes cloud, boosted quarterly revenue 70%. The spread of online teaching and distance learning due to the novel coronavirus fueled demand for cloud services.
The earnings from the platform and other businesses offset the losses at Line, the Tokyo subsidiary and messaging app operator in which Naver holds a 73% stake.
Second-quarter operating profit jumped 80% on the year to 230.6 billion won as consolidated sales climbed 17% to 1.9 trillion won. The content service segment lifted sales 59% due to the stay-at-home consumption of webtoons and music.
Naver maintained a 28% operating margin. Both the mainstay search engine business and the e-commerce operation have contributed to the company’s high profitability and stable growth.
Line is an exception, however. The so-called new businesses segment, of which Line is the principal operation, turned in an operating loss of 108.3 billion won for the second quarter. Line burned through almost all the promotional funds devoted to the smartphone payment app Line Pay.
But Line’s red ink improved from the 194.1 billion won loss a year earlier.
Line will merge with Yahoo Japan under a deal that will take the subsidiary off Naver’s consolidated books. Naver said the process for the merger has stalled due to the fallout from the coronavirus, along with antitrust reviews in Taiwan and Japan.
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