Business / Corporate

Line posts a profit in its first report card since global IPO

Bloomberg

Line Corp. posted a profit in its first earnings report since ushering in the year’s biggest technology debut, as monthly active users rose to 220 million.

Japan’s largest mobile messaging service announced ¥2.56 billion ($24.3 million) of net income in the six months through June, from a loss of ¥5.3 billion a year earlier. The company said it’s not issuing full-year forecasts.

Wednesday’s results offered a first full glimpse at its financial health since raising $1.3 billion in July from investors in Japan and the U.S.

Line, which is controlled by South Korea’s Naver Corp., lost money in two of the past three years as it focused on sustaining user growth at the expense of profitability. The messaging service is focusing on its main markets of Japan, Taiwan, Thailand and Indonesia, and pivoting toward advertising.

“It is expected to deliver year-on-year profit growth and that will start to become more important as time goes by,” Atul Goyal, an analyst at Jefferies Group, said before the release. “The focus now is on MAU in its core markets, growth in its advertisement business and its game revenues.”

Analysts estimates aren’t yet available as most research houses haven’t initiated coverage, but are expected to do so in coming weeks. After jumping as much as 52 percent above the IPO price of ¥3,300, Line’s shares have since pared gains as euphoria surrounding the launch wore off. On Wednesday, it closed 25 percent above that level in Tokyo.

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