Nexon Quarterly Securities Report: The Second Quarter of the 19th Fiscal Year

Key insights

6 takeaways

01
Nexon reported H1 2020 total revenue of ¥147,228 million and operating income of ¥68,254 million, representing a 4.1% year-over-year increase in operating income.See it on page 6
02
Strong performance in the Korean market offset revenue contractions in China, Japan, and the combined North American and European segments during the first half of 2020.See it on page 6
03
The company maintains a strong financial position with total assets of ¥765,934 million and an equity ratio of 86.7%.See it on page 16
04
Nexon recognized ¥2.9 billion in impairment losses during the period, specifically impacting goodwill at NEXON GT Co., Ltd. and game copyrights at Pixelberry Studios.See it on page 39
05
The board declared an interim dividend of ¥2.5 per share, resulting in a total payout of ¥2,211 million to shareholders.See it on page 44
06
Operational strategy remained consistent throughout the period, with the company utilizing foreign exchange gains to navigate market volatility caused by the COVID-19 pandemic.See it on page 5

Summary

Nexon demonstrated financial resilience during the first half of 2020, reporting total revenue of ¥147,228 million and operating income of ¥68,254 million. Despite the global disruptions caused by the COVID-19 pandemic, the company achieved a 4.1% year-over-year increase in operating income, bolstered by robust performance in the Korean market. These gains successfully offset revenue contractions observed across China, Japan, and the combined North American and European segments. The company maintains a conservative and stable financial foundation, evidenced by total assets of ¥765,934 million and a high equity ratio of 86.7%.

Operational activity remained consistent throughout the period, with no significant shifts in core business strategies or research and development initiatives. While the company recorded net cash outflows for both investing and financing activities, it successfully navigated market volatility through foreign exchange gains and disciplined accounting practices. Financial reporting adhered to IFRS 15 and IAS 34 standards, with independent oversight provided by PricewaterhouseCoopers Aarata LLC. Valuation methodologies for assets and liabilities utilized a three-level fair value hierarchy, which necessitated the recognition of ¥2.9 billion in impairment losses, specifically affecting goodwill at NEXON GT Co., Ltd. and game copyrights at Pixelberry Studios.

Shareholder value remains a priority, as evidenced by the board’s decision to issue interim dividends of ¥2.5 per share, totaling ¥2,211 million. The company’s capital structure saw minor adjustments, including the retirement of treasury stock and an increase in outstanding shares resulting from the exercise of stock acquisition rights. By maintaining stable earnings per share and a strong balance sheet, the organization continues to prioritize long-term fiscal health while adapting its regional reporting structures to better align with evolving global service demands.