NCSoft has released their first quarter financial results in a press release this morning. In their official release, they claim sales of 84.7 billion and net income up 107%.
NCsoft Announces 2007 First Quarter Financial Results
Company reports consolidated sales of KRW 84.7 billion, operating income of KRW17.1 billion and net income of KRW 14.1 billion
Note: 1USD = 929 Korean Won (KWN)
Seoul, South Korea, May 8, 2007-NCsoft® Corporation (KSE:036570.KS) today reported first quarter 2007 sales of KRW 84.7 billion (US$91.2 million), operating income of KRW 17.1 billion (US$18.4 million), pre-tax income of KRW 19.8 billion (US$21.3 million) and net income of KRW 14.1 billion (US$15.2 million) all on consolidated basis. Sales posted an increase of 9%. Operating income and pre-tax income both rose 96% respectively and net income surged 107%. Compared to the previous quarter, sales dropped 6%, while operating income and ordinary income rose 11% and 12%. Net income declined 24% on a quarterly comparison.
By region, stable sales of Lineage® and Linage II led to first quarter sales of KRW 50 billion (US$53.8 million) in Korea, KRW 12.9 billion (US$13.9 million) in North America, KRW 7.8 billion (US$8.4 million) in Europe and KRW 8.1 billion (US$8.7 million) in Japan. NCsoft also realized KRW 3.7 billion (US$3.4 million) in royalty income. Taiwan, which has been included in first quarter consolidated earnings for the first time, recorded sales of KRW 2.3 billion (US$2.5 million). Korea sustained a moderate quarter-to-quarter and year-to-year growth in sales of 2%, while both North America and Europe saw sales drop 28% quarter-to-quarter. However North American and Europe saw sales increases year-to-year of 14% and 102% respectively. By game title, sales of Lineage recorded KRW 30.4 billion, Lineage II KRW 32.8 billion (US$35.3 million), City of Heroes®/City of Villains® KRW 6 billion (US$6.5 million) and Guild Wars® KRW 11.5 billion (US$12.4 million). The percentage breakdown of sales by game title shows Lineage and Lineage II with 38% and 41%, respectively, followed by Guild Wars with 14% and City of Heroes/City of Villains with 7%.
NCsoft's first quarter operating income recorded KRW 17.1 billion (US$18.4 million), a quarter-to-quarter increase of 11%. The growth is attributed to efficient allocation and execution of resources which resulted in visible success in containing costs. The implementation of a constant monitoring system including a Project Review Committee and a Milestone Review Committee was the main driver of the success. As a result of these efforts, operating costs dropped 10% from the previous quarter.
NCsoft's CFO Lee Jae-ho said, "Our first quarter sales and operating income rose 9% and 96% respectively. Furthermore, we expect to attain sustainable growth in the second half after releasing a string of new game titles starting with the much anticipated closed beta testing of Richard Garriott's Tabula Rasa™ on May 2. The game's first primary markets are North America and Europe."
In Korea, the company plans to launch full service for Aion™ within the year after carrying out closed beta testing in the summer. Also NCsoft plans to introduce in May the first phase of the upgraded version of the service platform PlayNC® with integrated accounting and payment functions. In North America and Europe, Richard Garriott's Tabula Rasa and the new expansion, Guild Wars: Eye of the North™ will hit markets in the latter half of the year.
2007 1Q consolidated earnings (Unit: KRW mil.)
Q1, 07 Q4, 06 Q1, 06 QoQ YoY Sales 84,715 90,221 77,973 -6% 9% Games 80,988 85,463 72,183 -5% 12% Royalty 3,727 4,758 5,790 -22% -36% Operating Income 17,067 15,415 8,693 11% 96% Ordinary Income 19,773 17,652 10,113 12% 96% Net Income 14,121 18,650 6,823 -24% 107%