Rising advertising income aided Line Corp towards profits in the first two quarters of the year; the Japanese company has made public the earnings for the first time since their market listing.
27 Jul 2016 – Reuters
Line enjoyed a stellar debut on both the Tokyo and New York exchanges this month after the tech world’s biggest initial public offering of the year, as investors brushed off concern of slowing user growth and the mountain Line would have to climb to challenge leaders such as Facebook Inc’s (FB.O) WhatsApp.
Ahead of listing, Line said it had singled out advertising as a future growth driver. On Wednesday, it said ad sales grew 76 percent in the first half from a year earlier, and that their share of overall revenue grew to 37 percent from 28 percent.
In particular, game- and cosmetics-related adverts made up half of ad-based revenue, Line said.
“The advertising business has grown to be the largest pillar for Line,” Chief Executive Takeshi Idezawa said at an earnings briefing. “The performance was stronger than we’d expected.”
Line booked net profit of 2.6 billion yen ($24.3 million) for January-June compared with a net loss of 5.3 billion yen in the same period a year earlier.
Revenue climbed 19.8 percent to 67.3 billion yen. In its communications segment – which includes sales of emojis and electronic stickers – revenue grew 14.1 percent.
But revenue from content, which includes games, fell 5 percent, and the segment’s proportion to overall revenue dipped.
Competition in mobile gaming took a significant step up at the beginning of the second half of the year with the release of blockbuster Pokemon GO, backed by Nintendo Co Ltd (7974.T). But Idezawa said the game posed no threat to Line.