(2nd LD) Kakao Q3 operating profit up 15.5 pct on stable growth of platform biz

(ATTN: CUTS paras 10-11; RECASTS last 4 paras with details from conference call)

SEOUL, Nov. 5 (Yonhap) -- South Korean internet tech giant Kakao Corp. said Thursday its operating profit rose 15.5 percent from a year earlier, boosted by the stable growth of its flagship platform business.

On a consolidated basis, the company reported an operating profit of 240.3 billion won (US$179.2 million) in the July-September period, according to its regulatory filing.

Sales remained unchanged at 2.08 trillion won, while net income was down 7.9 percent to 177.7 billion won.

The company's flagship platform business saw sales grow 17 percent on-year to 1.24 trillion won.

Notably, turnover of its commerce business rose 13 percent on-year to 2.3 trillion won, as more people used the KakaoTalk platform to purchase goods during the Chuseok holiday and as well as to buy items for themselves, the IT company explained.

Kakao's ride-hailing and payment services, also included in its platform unit, generated 602.1 billion won in sales, up 21 percent on-year.

But sales from its content business were down 6 percent on-year to 851.7 billion won due to a drop in new album releases and large concerts, as well as a decline in sales from its social networking service, KakaoStory.

"We humbly accept that the pace of expansion of our AI services did not meet market expectations," Kakao's Chief Executive Officer (CEO) Chung Shin-a said in a conference call. But she said the company plans to concentrate all resources into rolling out AI services that surpass market expectations.

To that end, Kakao will speed up the introduction of its artificial intelligence (AI) assistant, Kanana Space, with a pilot run of the service to be launched in December.

A formal launch of Kanvas is also scheduled by the end of the year, it added. Kanvas was created as part of a government-led project to create AI services accessible to everyone.

The messenger app operator also decided to carry out a 150 billion-won share buyback to improve shareholder value.

fairydust@yna.co.kr
(END)