15F, 396 World Cup buk-ro, Mapo-gu, Seoul 121-795, Korea
——————————————————————————————————————— (Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F þ Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
GRAVITY REPORTS THIRD QUARTER OF 2022 RESULTS AND BUSINESS UPDATES
Seoul, South Korea – November 14, 2022 – GRAVITY Co., Ltd. (NasdaqGM: GRVY) (“Gravity” or “Company”), a developer and publisher of online and mobile games based in South Korea, today announced its unaudited financial results for the third quarter ended September 30, 2022, prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and business updates.
THIRD QUARTER 2022 HIGHLIGHTS
•Total revenues were KRW 102,377 million (US$ 71,509 thousand), representing an 6.1% increase from the second quarter ended June 30, 2022 (“QoQ”) and a 20.4% decrease from the third quarter ended September 30, 2021 (“YoY”).
•Operating profit was KRW 21,271 million (US$ 14,857 thousand), representing a 3.8% decrease QoQ and a 47.1% decrease YoY.
•Profit before income tax expenses was KRW 24,410 million (US$ 17,050 thousand), representing a 2.2% increase QoQ and a 41.1% decrease YoY.
•Net profit attributable to parent company was KRW 16,076 million (US$ 11,229 thousand), representing a 8.0% decrease QoQ and a 39.0% decrease YoY.
REVIEW OF THIRD QUARTER 2022 FINANCIAL RESULTS
Revenues
Online game revenues for the third quarter of 2022 were KRW 19,271 million (US$ 13,460 thousand), representing a 22.4% decrease QoQ from KRW 24,827 million and a 5.3% increase YoY from KRW 18,295 million. The decrease QoQ was mainly attributable to decreased revenues from Ragnarok Online in Taiwan and Thailand. The increase YoY was largely due to increased revenues from Ragnarok Online in Thailand and Korea. Such increase was partially offset by decreased revenue from Ragnarok Online in Japan.
Mobile game revenues were KRW 79,443 million (US$ 55,490 thousand) for the third quarter of 2022, representing a 16.8% increase QoQ from KRW 68,042 million and a 25.2% decrease YoY from KRW 106,218 million. The increase QoQ resulted primarily increased revenues from Ragnarok Origin, which was launched on September 15, 2022, in Taiwan, Hong Kong and Macau. Such increase was partially offset by decreased revenues from Ragnarok Labyrinth NFT in Southeast Asia, Ragnarok X: Next Generation in Southeast Asia and Taiwan, Ragnarok Origin in North America and Korea. The decrease YoY was due to decrease revenues from Ragnarok X: Next Generation in Southeast Asia and Ragnarok Origin in Japan and Korea. This decrease was partially offset by increased revenues from Ragnarok Origin in Taiwan, Hong Kong and Macau.
Other revenues were KRW 3,663 million (US$ 2,559 thousand) for the third quarter of 2022, representing a 0.4% increase QoQ from KRW 3,650 million and a 11.9% decrease YoY from KRW 4,157 million.
Cost of Revenue
Cost of revenue was KRW 59,829 million (US$ 41,790 thousand) for the third quarter of 2022, representing a 18.3% increase QoQ from KRW 50,575 million and a 9.6% decrease YoY from KRW 66,146 million. The increase QoQ was mainly due to increased commission paid for mobile game services related to Ragnarok Origin in Taiwan, Hong Kong and Macau. The decrease YoY was primarily due to commission paid for mobile game services related to Ragnarok X: Next Generation in Southeast Asia. Such decrease was partially offset by increased commission paid for mobile game service related to Ragnarok Origin in Taiwan, Hong Kong and Macau.
Operating Expenses
Operating expenses were KRW 21,277 million (US$ 14,862 thousand) for the third quarter of 2022, representing a 10.7% decrease QoQ from KRW 23,829 million and a 4.5% decrease YoY from KRW 22,282 million. The decrease QoQ was mainly due to decreased advertising expenses for Ragnarok Labyrinth NFT in global and commission paid for payment gateway fees related to Ragnarok Online in Taiwan and Thailand. The decrease YoY was mainly due to decreased salaries and advertising expenses for Ragnarok: The Lost Memories in Thailand.
Profit Before Income Tax Expenses
Profit before income tax expenses was KRW 24,410 million (US$ 17,050 thousand) for the third quarter of 2022 compared with profit before income tax expense of KRW 23,874 million for the second quarter of 2022 and profit before income tax expenses of KRW 41,435 million for the third quarter of 2021.
Net Profit
As a result of the foregoing factors, Gravity recorded a net profit attributable to parent company of KRW 16,076 million (US$ 11,229 thousand) for the third quarter of 2022 compared with net profit attributable to parent company of KRW 17,465 million for the second quarter of 2022 and a net profit attributable to parent company of KRW 26,351 million for the third quarter of 2021.
Liquidity
The balance of cash and cash equivalents and short-term financial instruments was KRW 293,684 million (US$ 205,134 thousand) as of September 30, 2022.
Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the exchange rate of KRW 1,431.67 to US$ 1.00, the noon buying rate in effect on September 30, 2022 as quoted by the Federal Reserve Bank of New York.
GRAVITY BUSINESS UPDATE
Ragnarok Online
Ragnarok Online has celebrated its 20th anniversary in Korea in the second half of 2022 since the game was initially launched in Korea on August 1, 2002. As celebrating its 20th anniversary, various kinds of online and offline events and promotions were placed in the third quarter of 2022.
Ragnarok Online IP-based Games
•Ragnarok Origin, a MMORPG mobile and PC game
Ragnarok Origin was launched in multi-platform including mobile and PC in Taiwan, Hong Kong and Macau in September 15, 2022. The game is scheduled to be launched in Southeast Asia in the first half of 2023.
•Ragnarok X: Next Generation, a MMORPG mobile game
Ragnarok X: Next Generation has run the CBT in Korea on October 11, 2022 and has started its pre-registration in Korea on November 3, 2022. Ragnarok X: Next Generation is scheduled to be launched in Korea in the first quarter of 2023.
•Ragnarok M: Eternal Love, a MMORPG mobile game
Ragnarok M: Eternal Love is planned to be launched in Vietnam in the first half of 2023.
•Ragnarok Labyrinth NFT, a blockchain mobile game
Ragnarok Labyrinth NFT was launched in global on September 22, 2022.
•Ragnarok Poring Merge, a blockchain mobile game
Ragnarok Poring Merge was designed as a blockchain game based on P2E systems. The game is prepared to be launched in Southeast Asia in the third quarter of 2023.
•Other Ragnarok Online IP-based games
Ragnarok: The Lost Memories, a Cinematic Newtro Story RPG mobile and PC game, has launched in Korea on August 10, 2022. The game is planned to be launched in Taiwan, Hong Kong and Macau in the first half of 2023.
Ragnarok Monster’s Arena, a Card SRPG mobile game, was launched in Thailand on September 1, 2022. The game also was launched in Korea on September 27, 2022. Ragnarok Monster’s Arena is named differently in Thailand and Korea. The game is as known as Ragnarok Tactics II in Thailand, and it is as known as Ragnarok Arena in Korea. Ragnarok Monster’s Arena is scheduled to be launched in Southeast Asia (except for Thailand), South Asia, Middle East and Oceania in the fourth quarter of 2022.
Ragnarok Begins, a MMORPG mobile and PC game, has run the second CBT for mobile and PC game version in North America on October 14, 2022. The game is scheduled to be launched in North America in November 15, 2022. The game has been developed by Gravity.
Ragnarok IP Game Jam with The Sandbox
Gravity initially signed a Ragnarok IP partnership agreement with The Sandbox, a metaverse gaming platform, on April 1, 2022. Gravity held the Ragnarok Game Jam with The Sandbox on September 7, 2022.
Business Agreement with Me2On
Gravity Neocyon Inc., a subsidiary of Gravity, has signed a business agreement with a mobile social casino game company, Me2On, on October 14, 2022 and is planned to launch a blockchain NFT game in the first half of 2023.
Investor Presentation
Gravity issued an investor presentation. The presentation contains the Company’s recent business updates, results of the third quarter in 2022 and Gravity’s business plan. The presentation can be found on the Company’s website under the IR Archives section at http://www.gravity.co.kr/en/ir/pds/list.asp. Korean and Japanese versions of the presentation are also provided on the website.
About GRAVITY Co., Ltd. ---------------------------------------------------
Gravity is a developer and publisher of online and mobile games. Gravity's principal product, Ragnarok Online, is a popular online game in many markets, including Japan and Taiwan, and is currently commercially offered in 91 markets and regions. For more information about Gravity, please visit http://www.gravity.co.kr.
Forward-Looking Statements:
Certain statements in this press release may include, in addition to historical information, “forward-looking statements” within the meaning of the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act 1995. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe”, “project,” or “continue” or the negative thereof or other similar words, although not all forward-looking statements contain these words. Investors should consider the information contained in our submissions and filings with the United States Securities and Exchange Commission (the “SEC”), including our annual report for the fiscal year ended December 31, 2021 on Form 20-F, together with such other documents that we may submit to or file with the SEC from time to time, on Form 6-K. The forward-looking statements speak only as of this press release and we assume no duty to update them to reflect new, changing or unanticipated events or circumstances.
Contact:
Mr. Heung Gon Kim Chief Financial Officer Gravity Co., Ltd. Email: kheung@gravity.co.kr
Ms. Somin Kim
Ms. Jeesun Lim IR Unit Gravity Co., Ltd. Email: ir@gravity.co.kr Telephone: +82-2-2132-7800
# # #
GRAVITY Co., Ltd.
Consolidated Statements of Financial Position
(In millions of KRW and thousands of US$)
As of
31-Dec-21
30-Sep-22
KRW
US$
KRW
US$
(audited)
(unaudited)
(unaudited)
(unaudited)
Assets
Current assets:
Cash and cash equivalents
99,105
69,223
107,684
75,216
Short-term financial instruments
148,000
103,376
186,000
129,918
Accounts receivable, net
52,615
36,751
78,855
55,079
Other receivables, net
1,080
754
227
159
Prepaid expenses
3,164
2,210
2,866
2,002
Other current assets
2,171
1,516
2,448
1,710
Total current assets
306,135
213,830
378,080
264,084
Property and equipment, net
11,338
7,919
9,879
6,900
Intangible assets, net
3,342
2,334
3,468
2,422
Deferred tax assets
1,719
1,201
1,494
1,044
Other non-current financial assets
3,019
2,109
3,366
2,351
Other non-current assets
1,973
1,379
1,599
1,117
Total assets
327,526
228,772
397,886
277,918
Liabilities and Equity
Current liabilities:
Accounts payable
41,199
28,777
61,640
43,055
Deferred revenue
13,481
9,416
15,512
10,835
Withholdings
3,596
2,512
2,712
1,894
Accrued expense
1,484
1,037
1,367
955
Income tax payable
10,629
7,424
4,272
2,984
Other current liabilities
3,608
2,520
3,587
2,505
Total current liabilities
73,997
51,686
89,090
62,228
Long-term deferred revenue
98
68
79
55
Other non-current liabilities
6,590
4,602
5,685
3,971
Total liabilities
80,685
56,356
94,854
66,254
Share capital
3,474
2,427
3,474
2,427
Capital surplus
27,098
18,928
27,098
18,928
Other components of equity
2,180
1,523
8,440
5,895
Retained earnings
213,318
148,999
263,290
183,904
Equity attributable to owners of the Parent Company
246,070
171,877
302,302
211,154
Non-controlling interest
771
539
730
510
Total equity
246,841
172,416
303,032
211,664
Total liabilities and equity
327,526
228,772
397,886
277,918
* For convenience purposes only, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,431.67 to US$ 1.00, the noon buying rate in effect on September 30, 2022 as quoted by the Federal Reserve Bank of New York.
GRAVITY Co., Ltd.
Consolidated Statements of Comprehensive Income
(In millions of KRW and thousands of US$ except for share and ADS data)
Three months ended
Nine months ended
30-Jun-22
30-Sep-21
30-Sep-22
30-Sep-21
30-Sep-22
(KRW)
(KRW)
(KRW)
(US$)
(KRW)
(KRW)
(US$)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues:
Online games
24,827
18,295
19,271
13,460
60,133
65,545
45,782
Mobile games
68,042
106,218
79,443
55,490
243,796
210,726
147,189
Other revenue
3,650
4,157
3,663
2,559
13,411
11,232
7,845
Total net revenue
96,519
128,670
102,377
71,509
317,340
287,503
200,816
Cost of revenue
50,575
66,146
59,829
41,790
169,541
155,658
108,725
Gross profit
45,944
62,524
42,548
29,719
147,799
131,845
92,091
Operating expenses:
Selling, general and administrative expenses
21,207
18,091
17,624
12,310
47,613
56,473
39,446
Research and development
2,956
4,143
3,745
2,616
12,299
9,933
6,938
Others, net
-334
48
-92
-64
535
-263
-184
Total operating expenses
23,829
22,282
21,277
14,862
60,447
66,143
46,200
Operating profit
22,115
40,242
21,271
14,857
87,352
65,702
45,891
Finance income(costs):
Finance income
4,100
2,128
5,343
3,732
4,325
11,051
7,719
Finance costs
(2,341)
(935)
(2,204)
(1,539)
(2,235)
(5,249)
(3,666)
Profit before income tax
23,874
41,435
24,410
17,050
89,442
71,504
49,944
Income tax expense
6,462
15,151
8,312
5,806
24,779
21,663
15,131
Profit for the year
17,412
26,284
16,098
11,244
64,663
49,841
34,813
Profit attributable to:
Non-controlling interest
(53)
(67)
22
15
(19)
(131)
(92)
Owners of Parent company
17,465
26,351
16,076
11,229
64,682
49,972
34,905
Earning per share
- Basic and diluted
2,513
3,792
2,313
1.62
9,308
7,191
5.02
Weighted average number of shares outstanding
- Basic and diluted
6,948,900
6,948,900
6,948,900
6,948,900
6,948,900
6,948,900
6,948,900
Earning per ADS
- Basic and diluted
2,513
3,792
2,313
1.62
9,308
7,191
5.02
* For convenience, the KRW amounts are expressed in U.S. dollars at the rate of KRW 1,431.67 to US$ 1.00, the noon buying rate in effect on September 30, 2022 as quoted by the Federal Reserve Bank of New York.
(1) Each ADS represents one common share.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
