South Korea’s mobile platform giant Kakao Corp. saw its revenue fall for the first time in a year in the January-March period despite flourishing webtoon and contents business amid rising labor cost.

In a regulatory filing on Wednesday, Kakao raised 1.65 trillion won ($1.3 billion) in sales in the first quarter ended March, up 31.3 percent on year but down 7.5 percent on quarter. It is the first time for the company to report on-quarter decline since the first quarter of 2020.

On-year sales growth also slowed to 30 percent level for the first time in 7 quarters after the second quarter of 2020.

Kakao shares were trading 1.13 percent higher at 89,500 won on Wednesday morning.

Operating profit was up 48.8 percent on quarter and 0.7 percent on year to 158.7 billion won in the first quarter, delivering 9.6 percent profit margin. Operating profit was 4.4 percent higher than the market consensus of 151.9 billion won.

Net profit soared 450.6 percent on year and 489.4 percent on quarter to 1.3 trillion won.

Operating expense added 36 percent to 1.49 trillion won after the company raised average annual salary by 59 percent.

The platform business delivered 886 billion won in revenue for the first quarter, up 27 percent on year but down 12 percent on quarter. In particular, Talk Biz, which manages ads and e-commerce services via Kakao Talk, saw revenue jump 23 percent on year, although 3 percent down on quarter.

Revenue from portal business fell 3 percent on year and 13 percent on quarter to 114 billion won.

Other platform businesses saw revenue increase 52 percent on year to 311 billion won on a surge in Kakao Mobility and Kakao Pay profits. Revenue, however, was down 22 percent on quarter.

Revenue from content business climbed 36 percent on year but down 2 percent on quarter to 765.7 billion won in the January-March period. Music division generated 204.4 billion won in revenue, up 11 percent on year and 1 percent on quarter, while media 75 billion won, up 3 percent on quarter but down 16 percent on quarter.

Revenue from games surged 89 percent on year but fell 11 percent on quarter to 245.8 billion won in the first quarter. Sales from “Odin: Valhalla Rising” release in Taiwan is projected to be reflected in its second quarter revenue.

Revenue from story business jumped 38 percent on year and 13 percent on quarter to a quarterly high of 240.5 billion won on the back of new lineup of Japan’s Piccoma and a rise in platform transactions backed by Kakaopage original drama “The Office Blind Date.”

Kakao plans to utilize 300 billion won in growth funds over the next five years and aggressively improve environmental social and governance (ESG) management and seek barrier-free initiative that enhances digital accessibility.

By Lee Eun-joo

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