Webtoon Leisure CEO Kim Jun-koo , middle, poses with webtoon artists and different contributors in the course of the firm’s Nasdaq debut in New York, June 27, 2024 (native time). Yonhap
Webtoon Leisure, a Naver-controlled, Nasdaq-listed firm, is grappling with strain on earnings from a weakening gained after its high-profile debut on the New York inventory market final yr, trade officers stated Friday.
The corporate reviews its gross sales in U.S. {dollars} as a U.S.-listed firm, whereas round 60 % of its shares are owned by Korean web large Naver and roughly 24 % are held by LY Corp., a three way partnership between Naver and the Japanese multinational funding conglomerate SoftBank.
In the meantime, the corporate relies upon closely on income from paid webtoons operated by its subsidiary Naver Webtoon, with Korea and Japan accounting for 88 % of whole gross sales.
Underneath these circumstances, trade officers stated gross sales within the fourth quarter are more likely to decline from the earlier quarter, because the gained has weakened additional in opposition to the greenback.
In line with the U.S. Securities and Trade Fee, Webtoon Leisure posted $378.04 million in third-quarter gross sales, calculated utilizing a mean change fee of 1,385.4 gained per greenback.
Whereas gross sales rose 8.7 % year-on-year, it could have elevated 9.1 % to $379.45 million with out the results of the weaker gained, an official stated.
“In different phrases, forex actions decreased the corporate’s total income progress,” he added.
One other official described the scenario as “far worse within the fourth quarter,” noting that the change fee has remained above 1,400 gained per greenback from October by way of December.
The speed even breached the 1,480 stage, hitting 1,480.10 on Monday and 1,483.6 on Tuesday, marking the primary time since 2009 — the peak of the Nice Recession — that the change fee ended two consecutive days on this vary.
As for the Japanese forex, the yen-dollar change fee entered the 150 vary in mid-October and has since climbed to about 156.
“As Webtoon Leisure depends on Korea and Japan for its income, international change dangers will inevitably have an effect on its earnings when transformed into {dollars},” the official stated.
Even excluding forex results, the corporate expects fourth-quarter gross sales to say no, pushed by a considerable stage of year-end bills. These embrace severance prices and minimal income ensures to contracted cartoonists, totaling an estimated $16.6 million.
“The corporate is projected to put up a year-on-year decline of two.3 to five.1 % in gross sales even with out taking change charges into consideration,” one other official stated.
Webtoon Leisure turned the primary Korean content material firm to debut on the New York inventory market in June 2024. The corporate has been working with Disney, Warner Bros. and different Hollywood studios to develop its presence within the international storytelling market.
