Japanese messaging app operator Line Corp said on Wednesday net income swung to profit in the third quarter, as advertising sales increased after it introduced a new platform in June for hosting digital ads. Line, which raised $1.3 billion in the world's biggest tech IPO this year, has said it is strongly positioned in its four core markets - Japan, Taiwan, Thailand and Indonesia - although it has marketed itself as delivering steady returns rather than explosive growth.
Line, which derives most of its income from mobile games and sales of cartoon emoticons called "stickers," reported a net profit of 5.3 billion yen ($50.8 million) for the first nine months of 2016. It booked a net loss of 7.6 billion yen during the same period last year. The company did not release a breakdown of results for the July to September period but the quarterly results were derived from calculations by Reuters based on earlier earnings.
Based on the calculations, the company booked a net profit of 2.4 billion yen ($23 million) between July and September, compared to a 2.3 billion yen loss in the same period last year. January to September revenue was 103.2 billion yen, up 17.2 percent from the same period a year earlier, Line said.
That meant third-quarter revenue came in at 35.9 billion yen, the calculations showed, up 12.6 percent from the same period a year ago. During the third quarter, Line launched six new games, including "Gundam Wars" - a tie up with popular anime TV characters. It previously warned that expenses from marketing the games, four of which were developed in-house, could have a temporary impact on operating profit. Line, controlled by South Korea's Naver Corp, has singled out ads as a key source of future revenue and third-quarter advertising sales rose 66 percent from the previous quarter to 12 billion yen, the Reuters calculations showed.
Line's eponymous messaging app had 220 million active monthly users at the end of September, 3.5 percent higher than a year earlier, but flat versus the end of June 2016. That is less than WhatsApp and Messenger, both owned by Facebook Inc, which boast 1 billion users each. However, Line is one of the few pure messaging app plays available to investors. Line, which is listed in both Tokyo and New York, has climbed over 45 percent since its IPO in July. Prior to the earnings report, it was up 2.5 percent.
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Updated Date: Oct 26, 2016 19:24:15 IST