Nexon Announces Fourth Quarter and Full Year 2016 Results
NEXON Co., Ltd. (“Nexon”) (3659.TO), a global leader in online and mobile games, today announced financial results for its fourth quarter and fiscal year ended December 31, 2016.
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“Our unique ability to develop and operate engaging, distinctive games that cultivate thriving interactive communities and grow steadily over the long term continued to drive value and results in 2016 fourth quarter,” said Owen Mahoney, President and Chief Executive Officer of Nexon. “We continue to see strong performance across our portfolio of games, including storied hits like Dungeon&Fighter in China, as well as titles like EA SPORTS™ FIFA Online 3, EA SPORTS™ FIFA Online 3 M in Korea and HIT in Taiwan and Thailand. Together, their performance helped drive fourth quarter revenue that was above expectations. Heading into 2017, we have an exceptionally strong pipeline, including titles such as LawBreakers, Durango, Dynasty Warriors Unleashed and Dark Avenger 3, that we believe will continue to validate our proven and differentiated approach.”
Full Year 2016 Highlights:
Ÿ Full year revenues were 183.1 billion yen, down 4% year-over-year on as-reported basis.
Ÿ Operating income was 40.6 billion yen, down 35% year-over-year on as-reported basis. Adjusted1 operating income was 63.2 billion yen, up 1% year-over-year on as-reported basis.
Ÿ Net income2 was 20.1 billion yen, down 63% year-over-year on as-reported basis. Adjusted1 net income2 was 42.7 billion yen, down 23% year-over-year on as-reported basis.
Fourth Quarter 2016 Highlights:
Ÿ Fourth quarter revenues were 43.3 billion yen, down 6% year-over-year on as-reported basis, exceeded our outlook driven by:
– Dungeon&Fighter in China’s successful Winter update and in-game item sales
– EA SPORTS™ FIFA Online 3, EA SPORTS™ FIFA Online 3 M in Korea’s successful live game operations and promotions
– HIT in Taiwan and Thailand
Ÿ Operating income was 7.3 billion yen, below our outlook primarily due to impairment loss of 3.7 billion yen on prepaid royalties related to publishing titles
Ÿ Net income2 was 11.2 billion yen, exceeded our outlook primarily due to the FX gain of 20.6 billion yen on our U.S. dollar-denominated cash deposits and accounts receivable due to the depreciation of the Korean won and the Japanese yen against the U.S. dollar, partially offset by 14.6 billion yen deferred tax expense additionally recorded for undistributed profits of overseas subsidiaries.
First Quarter 2017 Outlook:
Ÿ Expect first quarter 2017 revenues in the range of 62.4 to 67.1 billion yen.
– Expect PC online game revenues in the range of 52.1 to 55.6 billion yen.
– Expect mobile game revenues in the range of 10.3 to 11.6 billion yen.
Ÿ Expect operating income in the range of 30.3 to 34.8 billion yen.
Ÿ Expect net income2 in the range of 27.1 to 30.8 billion yen.
1 Adjusted for the impairment loss on gloops’ goodwill recorded in Q1 2016 of 22.6 billion yen.
2 Net income refers to net income attributable to owners of the parent company, as stated in Nexon’s consolidated financial results.
Earnings Presentation, Webcast and Replay:
Nexon management will host an earnings presentation for analysts, investors and media to discuss the Company’s financial results and outlook. The presentation, which will be webcast live on Nexon’s IR website on February 10 at 5:00 p.m. Japan Standard Time (JST) / 3:00 a.m. Eastern Standard Time (EST), will be simultaneously conducted in Japanese and English. A replay of the presentation will be available on the website within several days.
