SEOUL, KOREA - Daum Communications said it may not be able to reach the annual operating profit goal of 17 percent by the year's end.

 

In the third-quarter conference call on November 8, Daum's investors relations senior manager Choi Yong-seok said, "Given our revenue structure of relying on advertising income for more than 90 percent of total sales revenue, our performance is highly sensitive to economic conditions. In addition, our game-related sales also suffered because several game launches were delayed or cancelled."

 

"As the sales performance languished, marketing expenses also fell slightly. Due to slower growth in sales and the change in the ratio of income sources, we expect the operating profit ratio to be a little below the 17-percent target," he added.

 

During the third quarter, the company posted a consolidated sales revenue of 129,737 million won and an operating profit of 20,296 million won. The sales revenue rose 18.5 percent from the same quarter last year, owing to a rise in sales from the use of its own search engine platform and an increase in mobile ad incomes. But its operating profit declined 8.8 percent, because of lackluster display ads and higher payroll costs.