Expenses were attributed to hiring, wage hikes
Budget spent for personnel became reason for the drop in Kakao Pay Corp's net profits in the first quarter, Yonhap News Agency reported.
Kakao Pay Corp., the online payment unit of South Korean tech giant Kakao Corp., reported in its regulatory filing a net profit of KRW3.8 billion in the first quarter.
This is a 68.4% on-year drop, read Yonhap's report, which was attributed to the increase in operating expenses, which rose 29.1% to KRW124.4 billion.
According to Yonhap, the increase in operating expenses is because of the company's personnel-related expenditures, including hiring of new employees, wage hikes, and annual bonuses for staff.
The filing from the company also saw an operating loss of KRW1.1 billion in the period from January to March, compared to the KRW10.8 billion operating profit a year ago. Sales saw a 15.1% increase in sales to KRW123.3 billion.
Sales from transaction service increased to KRW94.3 billion, according to Yonhap, but its financial service reported a loss in sales because of a slowdown of business of its brokerage subsidiary Kakao Pay Securities Corp.
Read more: Do not disturb – South Korea to ban work-related texts after office hours
The drop came after Kakao Crop reported back in February that its net profit for 2021 surged nearly tenfold on-year, thanks to the growth of its e-commerce services and messenger platform amid the pandemic.
Yonhap News Agency reported that its net profit hit KRW1.64 trillion last year, up from the KRW167.1 billion the previous year.
Kakao is now one of the largest publicly traded company in South Korea, with founder and chairman Kim Beom-soo topping Forbes' Korea's Richest 2022.
Kim, with a net worth of $7.8 billion as of May 5 according to Forbes, recently announced that he was stepping down as chairman of the board to focus more on the company's global expansion strategy.
