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Korea Herald
08-08-2025
- Business
- Korea Herald
Naver hits all-time high quarterly sales as profits climb 10%
Naver CEO Choi Soo-yeon on Friday expressed strong confidence in the company's artificial intelligence capabilities, vowing to play a pivotal role in shaping Korea's AI ecosystem through its cloud service subsidiary's full-stack competencies. Speaking during a conference call following Naver's second-quarter earnings release, Choi highlighted the strength of Naver Cloud in building and operating data centers, developing large language models and managing advanced graphics processing unit infrastructure. 'We see sovereign AI as a tremendous opportunity. Years of investment in AI technology are now laying the foundation for long-term growth,' Choi said. 'We are already witnessing tangible results, such as being selected as the service provider for GPU rental to support the World Best LLM Challenge in July and being chosen to lead the development of Korea's national LLM.' The CEO further emphasized that the IT giant is actively expanding its sovereign AI business globally. 'Leveraging our domestic experience in technology and service operations, we aim to meet the AI sovereignty needs of overseas governments and institutions,' she said. 'With the reliability and stability that only Naver can provide, we plan to broaden our global footprint.' While reiterating Naver's technological independence, Choi also expressed openness to collaboration. 'We remain open to cooperating in initiatives like the national LLM project, where a healthy ecosystem is essential,' she said. Earlier in the day, Naver reported its second-quarter earnings, posting an operating profit of 521.6 billion won ($376.6 million) and sales of 2.92 trillion won — a record high for a single quarter. Operating profit rose 10.3 percent on-year, while sales increased by 11.7 percent. Net profit stood at 497.4 billion won. Market intelligence firm FnGuide had forecast operating profit of 528.1 billion won and revenue of 2.9 trillion won. Naver attributed its robust performance to steady growth across its key business segments. By segment, revenue totaled 1.04 trillion won from its search platform, 861.1 billion won from commerce, 411.7 billion won from fintech, 474 billion won from content and 131.7 billion won from enterprise. Choi stressed the company's long-term vision, 'Naver will continue strengthening its platform competitiveness and business capabilities through AI, while also securing new business references to support sustainable global growth.'
Korea Herald
07-08-2025
- Business
- Korea Herald
Kakao to debut first OpenAI collaboration next month
Kakao said Thursday that it would unveil the first outcome of its collaboration with OpenAI, the creator of ChatGPT, at its annual developer conference 'if(kakao)' next month, with plans to launch the product by year-end officially. 'We plan to reveal the actual shape of the product in September's 'if(kakao)' event. And before our next earnings announcement, we expect everyone will be able to experience it firsthand,' said Kakao CEO Chung Shin-a during the company's second-quarter earnings conference call. 'Starting in the second half of this year, the artificial intelligence service with the world's largest user base and Korea's dominant mobile platform will join forces to capture the domestic business-to-consumer AI market rapidly.' Kakao also unveiled plans to launch Korea's first on-device AI service based on its lightweight model through its mobile messenger KakaoTalk, signaling a new era of embedded AI experiences. 'Rather than functioning as a separate feature in a fixed space, it will serve as a 'middle layer' that recommends context-aware actions across various parts of KakaoTalk. In time, users will be able to complete necessary tasks entirely within the app,' she said. The announcement came alongside Kakao's release of its second-quarter earnings results, which exceeded market expectations and set new quarterly records for both operating profit and sales. Operating profit for the April-June period jumped 39 percent on-year to 185.9 billion won ($134 million), while revenue rose 1 percent to 2.02 trillion won, according to the company. These results outpaced the market consensus compiled by financial data provider FnGuide, which had forecast 125.4 billion won in operating profit and 1.95 trillion won in sales. Kakao attributed the robust performance to balanced growth across its business lines, particularly advertising, e-commerce, payment and mobility. 'What's especially encouraging is that Kakao has successfully enhanced operational efficiency,' the company said. Platform revenue rose 10 percent on-year to 1.06 trillion won, driven by a 16 percent increase in business message revenue, a key focus area for the company. Commerce-related services, including KakaoTalk-based gifting and group-buying platform TokDeal, posted a 10 percent revenue increase to 221.2 billion won, with self-purchasing via 'Gift to myself' seeing notable growth. Total transaction volume for commerce in the second quarter rose 6 percent to 2.5 trillion won. Sales from Kakao's other platform segments — which include mobility and payment services — climbed 21 percent on-year to 434.8 billion won. The mobility division saw growth driven by parking and express delivery services, while Kakao Pay benefited from strong performance in both financial and platform-based services, achieving double-digit revenue growth. On the contrary, portal business revenue dropped 11 percent on-year to 78.3 billion won. The content segment saw a 7 percent decline in revenue, totaling 973.1 billion won. Gaming revenue fell, but music and story content posted slight gains, each rising 1 percent to 517.5 billion won and 218.7 billion won, respectively.
Korea Herald
08-07-2025
- Business
- Korea Herald
Samsung's Q2 profit falls short as chip slump, tariffs take toll
To offset earnings miss, tech giant launches W3.91tr buyback with major share cancellation Samsung Electronics forecast its earnings to fall significantly short of market expectations in the second quarter this year, dragged down by weak semiconductor sales, unexpected inventory-related costs and growing uncertainties including US tariffs. In its earnings guidance Tuesday, the tech giant predicted its consolidated sales to post 74 trillion won ($54.1 billion) for the April-June period, down 0.09 percent on-year. The operating profit estimate plunged 55.9 percent to post at around 4.6 trillion won. The figures came in well below market consensus, which had forecast 76.2 trillion won in sales and 6.2 trillion won in profit, according to estimates compiled by market intelligence firm FnGuide. While Samsung did not release a detailed breakdown of the earnings by business, it explained that its Device Solution division, which oversees the company's semiconductor business, saw a profit decline from the previous quarter due to inventory-related costs and the impact of US export controls on advanced AI chips to China. Weak performance in the chip sector was further weighed down by large-scale inventory valuation losses. Industry sources say Samsung likely cleared out older high-bandwidth memory products — such as those made before the advanced 12-high HBM3E currently undergoing Nvidia's quality testing — or chips that became difficult to sell due to US export restrictions to China. Anticipating potential losses from the devaluation of the previously manufactured chips, Samsung appears to have preemptively booked these costs in the second quarter. The chip giant also appears to have posted a loss in its non-memory business. Sales fell short of expectations due to US government export controls and related inventory write-downs occurred, affecting shipments of lucrative HBM chips. "Improved HBM products are currently being evaluated and shipped to customers," Samsung said in an explanation. "While the non-memory business continued to suffer from low line utilization, we expect losses to narrow in the second half as utilization improves in line with gradual demand recovery." Securities firms estimate that the DS Division's Q2 operating profit may have fallen below 1 trillion won. "Samsung's HBM performance in Q2 likely fell short of expectations, while NAND flash prices declined compared to the previous quarter, widening losses," Chae Min-sook, an analyst at Korea Investment & Securities, said. "The foundry business is also expected to have recorded a loss similar to Q1, and the sharp drop in the won-dollar exchange rate since June will likely have a negative impact on both revenue and operating profit." US tariff hikes also appear to have contributed to Samsung's poor Q2 results. Shifting US trade policies and weakening global consumer demand appear to have affected the company's consumer electronics and TV businesses. While market expectations for the tech giant's third-quarter performance remain mixed, eyes are on whether Samsung will secure a rebound with the launch of its new foldable smartphones — the Galaxy Z Fold 7 and Galaxy Z Flip 7 — set for Wednesday. The new smartphone series features Samsung's in-house Exynos 2500 chip, raising hopes that it could not only boost mobile earnings but also help revive the company's struggling logic chip and foundry businesses. Meanwhile, Samsung also announced a 3.91 trillion won share buyback program, with 2.81 trillion won worth of shares to be canceled to enhance shareholder value. The remaining 1.1 trillion won will be used for employee bonuses, the company said. Samsung is scheduled to release its full financial results, which include net earnings and performance breakdowns by business division, on July 31.
Korea Herald
07-07-2025
- Business
- Korea Herald
LG Electronics Q2 profit nearly halved as US tariffs bite
LG Electronics' preliminary operating profit plunged nearly 50 percent in the second quarter from a year earlier, coming in below market forecasts as the South Korean tech giant grappled with US tariffs and weakening demand. In its earnings guidance Monday, the company said it expects to post an operating profit of 639.1 billion won ($467 million) for the April-June period, marking a 46 percent drop from the same period last year. Revenue slipped 4 percent on-year to 20.74 trillion won. The results also undershot the already lowered consensus forecast of 847 billion won in operating profit and 21.47 trillion won in revenue, according to estimates compiled by market intelligence firm FnGuide. 'Amid delayed recovery in consumer sentiment in key markets, adverse business environment continued due to tariff-related burdens from the shift in US trade policy in the second quarter and intensified market competition,' LG said in a statement. LG explained that its flagship home appliance unit, along with its business-to-business segments — including vehicle components and heating, ventilation and air conditioning, or HVAC — managed to be profitable. But its media and entertainment unit, which includes TVs and the webOS platform, weighed down overall earnings due to rising liquid crystal display panel prices and increased marketing expenses from intensified competition. The company added that US tariffs as well as steel and aluminum-related duties and logistics expenses affected profitability. In April, US President Donald Trump imposed a 10 percent tariff on all imports effective immediately, separately from his country-specific "reciprocal" tariffs that were delayed by 90 days until July 9. While LG manufactures washing machines and dryers at its US plant, the bulk of the company's key appliances sold in the American market are still produced overseas, including in South Korea, Mexico and Vietnam, which are all subject to duties. LG's heavy dependence on the US market, which accounts for roughly 30 percent of its home appliance sales, leaves the company particularly vulnerable to such tariffs, according to industry analysts. The financial hit was further exacerbated in late June, when the US expanded 50 percent steel tariffs to cover washing machines, refrigerators and other household appliances containing steel components. During the first-quarter earnings call in April, LG said it was considering price hikes for certain products and shifting production of some home appliances to the US in response to the new tariffs. Looking ahead, LG said it plans to focus on its B2B segment in the second half, particularly in HVAC systems and automotive components. The company has been putting all-out efforts into expansion of its HVAC operations, recently signing an acquisition deal with Norwegian hot water solutions provider OSO Hotwater as part of its push into the fast-growing HVAC market.
Korea Herald
27-05-2025
- Business
- Korea Herald
Bank stocks rally as stronger won boosts capital ratios
Shares of South Korea's largest financial service providers — Hana, Woori, KB, and Shinhan — surged Tuesday, driven by expectations of stronger shareholder returns supported by improved capital adequacy. Hana Financial Group shares rose as high as 70,700 won ($57.57) during intraday trading, marking the highest price since its transition to a holding company in December 2005. The stock later trimmed some gains and closed at 70,100 won. Woori Financial Group also saw its shares hit a record high of 18,310 won during trading, the highest since becoming a holding company in January 2019, before closing daytime trading at 18,290 won. Other major financial service providers posted strong gains in stock prices as well. On Monday, KB Financial Group shares climbed to 102,000 won, approaching its all-time high of 103,900 won recorded on Oct. 25. With this rally, the firm's market capitalization reached 40.13 trillion won, making it the fifth-largest company on the local stock market, outrunning market giants such as Hyundai Motors and Hanwha Aerospace. It was the first time in nearly 15 years for KB to take the No. 5 spot since March 2010. However, as of Tuesday afternoon, KB shares edged down slightly and wrapped up trading at 101,900 won, dropping the company to sixth place in market cap, overtaken by Hanwha Aerospace, which stood at 41.95 trillion won. Shinhan Financial Group shares also posted a strong gain, closing at 56,500 won — a steep climb from 42,500 won on April 9. The stock's previous high stands at 64,600 won logged on Aug. 30. The recent rally in bank stocks is largely attributed to the strengthening of the Korean won. The currency appreciated into the 1,360 won per dollar range this week, recovering more than 100 won from its April low of nearly 1,490 won. On Tuesday, the value of the won was quoted at 1,369.5 per dollar when the daytime trading closed. A stronger won boosts the Common Equity Tier 1 (CET1) ratio, a key indicator of banks' capital adequacy, thereby allowing financial firms greater flexibility in enhancing shareholder returns. The improved capital position comes alongside solid earnings. The four major financial groups recorded a combined net profit of 4.92 trillion won in the first quarter of 2024, the highest Q1 performance on record, surpassing the 4.91 trillion won posted in Q1 2023. According to market tracker FnGuide, the firms are projected to post a combined net profit of 17.64 trillion won this year, up 6.8 percent year-on-year. "Considering the banks' profitability, even with increased treasury share buybacks, the CET1 ratio is still expected to improve," said Choi Jeong-wook, an analyst at Hana Securities. "Share prices of global banks tend to track the scale of their treasury share repurchases."
