KRAFTON Separate Financial Statements: 2022

Key insights

6 takeaways

01
KRAFTON reported 2022 total revenue of approximately KRW 1.77 trillion, generating an operating profit of KRW 737.8 billion and a net profit of KRW 487.1 billion.See it on page 8
02
The company maintains a strong balance sheet with KRW 5.04 trillion in equity and a conservative debt-to-equity ratio of 14.52%.See it on page 37
03
Aggressive capital allocation resulted in KRW 3.92 trillion invested in subsidiaries and financial assets, though this led to KRW 176.9 billion in impairment losses, largely driven by Unknown Worlds Entertainment.See it on page 63
04
KRAFTON executed a KRW 2.4 trillion transfer of capital reserves in 2022 to offset accumulated deficits.See it on page 10
05
Earnings per share for the 2022 fiscal year were recorded at KRW 10,388, impacted by impairment adjustments and share-based payment expenses.See it on page 100
06
The company received an unmodified audit opinion from KPMG Samjong and continues to operate under K-IFRS accounting standards.See it on page 3

Summary

KRAFTON’s 2022 separate financial statements provide a comprehensive overview of the company’s fiscal health, confirming a stable financial position with an unmodified audit opinion from KPMG Samjong. For the 2022 fiscal year, the company reported total revenue of approximately KRW 1.77 trillion, primarily driven by mobile game services within the Asian market. Despite a slight year-over-year revenue decline, the company maintained strong operational performance, yielding an operating profit of KRW 737.8 billion and a net profit of KRW 487.1 billion.

The company’s balance sheet reflects a robust equity base of KRW 5.04 trillion and a conservative debt-to-equity ratio of 14.52%. Financial management throughout the year was characterized by significant capital allocation toward subsidiary investments and financial assets, which totaled approximately KRW 3.92 trillion. However, this aggressive investment strategy necessitated the recognition of KRW 176.9 billion in impairment losses, with a substantial portion attributed to the subsidiary Unknown Worlds Entertainment. These adjustments, alongside fluctuations in share-based payment expenses, influenced the year’s earnings per share, which settled at KRW 10,388.

KRAFTON continues to adhere to K-IFRS accounting standards, employing rigorous valuation techniques for financial instruments and maintaining a clear framework for managing foreign exchange exposure and liquidity. The company’s capital structure underwent a notable shift in 2022, involving a KRW 2.4 trillion transfer of capital reserves to offset accumulated deficits. With effective internal controls and a focus on long-term growth through strategic acquisitions and licensing agreements, the company remains positioned to manage its ongoing financial commitments and operational obligations while navigating the complexities of the global gaming market.