South Korea’s biggest mobile platform operator Kakao Corp. reported strong third-quarter earnings and beat market expectations thanks to the burgeoning sales of its contents business including mobile games and music.

The company announced in a regulatory filing on Thursday that its preliminary operating profit for the July to September period this year soared 87 percent on year to 30.3 billion won ($26.3 million) on a consolidated basis, slightly above the market expectations of 29.8 billion won. Sales rose 70.5 percent over the cited period to 391.4 billion won, coming above the market estimations of 379 billion won as well. Net income, however, fell 7.7 percent to 13.6 billion won, failing to meet the analysts’ expectations of 18.3 billion won as financial costs increased.

The robust performance was driven by the brisk sales from contents platform business that posted sales of 198.4 billion won for the third quarter ended September, surging 187.2 percent from the same period last year.

The rising popularity of its newly-released mobile games such as Sword and Magic for Kakao boosted entire sales from game business by 52.7 percent to 78.5 billion won. Music contents sales made by Melon, music streaming label of Loen Entertainment Inc. that Kakao took over early this year, amounted to 95.5 billion won, contributing to the strong results as well.

Advertising sales from internet portal Daum and mobile messenger KakaoTalk fell 13.5 percent during the same period to 126.9 billion won due to the low seasonal demand and optimizations of its ad platform, the company said.

Kakao raked in 66.1 billion won in sales from other sources excluding contents and ad business, jumping 377.6 percent on year thanks to the rise in revenue of Kakao Friends Flagship Store in Gangnam, southern Seoul, that sells products featuring KakaoTalk’s characters and solid sales made by its KakaoTalk Gift service and Loen Entertainment’s music business.

The company said that it plans to make improvements of its online portal Daum by changing its mobile app icon and reforming news service. It also expects that its contents business would continue to show strong performance as its new mobile game Destiny Child for Kakao topped in both Apple’s App Store and Google Play Store.

Shares of Kosdaq-listed Kakao rose 10.94 percent to 79,100 won as of 13:48 p.m. in Seoul trading Thursday.

By Yoon Jin-ho

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]