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Line, Japan's most popular instant messaging service which went
public in the world's biggest tech IPO of 2016, posted a net
profit of 7.56 billion yen ($66.49 million) for the year ended
Dec. 31, compared to a loss of 7.58 billion yen in the previous
year.
The company, controlled by South Korea's Naver Corp.
<035420.KS>, generates most of its income from advertisements,
mobile games featuring cuddly animals, and emoticon "stickers"
which adorn messages.
Annual operating profit surged 10-fold from the previous year to
19.90 billion yen, boosted by growth in ad revenues, which
jumped more than 50 percent in the fourth quarter alone.
But operating profit came in 17 percent lower than analyst
forecasts for 23.91 billion yen according to a mean estimate
from Thomson Reuters. Net profit was also lower than forecasts
for a profit of 8.84 billion yen.
The company said that it had yet to settle some payments for its
gaming and sticker content in the three months to December,
resulting in a 678 million yen hit to quarterly operating
income.
Increased hiring lifted operating expenses as Line expands its
workforce, and these costs also capped operating profit in the
fourth quarter. The company said it expected such costs would
continue into the first quarter of 2017, although it still
expected to post an operating profit during the period.
(Reporting by Naomi Tajitsu; Editing by Muralikumar Anantharaman)
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