Line Posts Profit in First Report Since IPO

TOKYO—Japan's Line Corp. posted a net profit of ¥ 2.56 billion ($24.5 million) in the first half of this year compared with a net loss of ¥ 5.3 billion a year before, in its first quarterly earnings report since the operator of the popular messaging app raised $1.26 billion in the biggest technology initial public offering so far this year.

Tokyo-based Line said Wednesday it posted an operating profit of ¥ 13.4 billion in the January-June period, compared with an operating loss of ¥ 934 million a year earlier. Line posted a revenue of ¥ 67 billion compared to ¥ 56 billion the same period last year.

Line's earnings comes after the company made a strong debut in a dual U.S.-Japan listing earlier this month, where it sold a total 40.25 million shares for an initial IPO price of $32.84 in New York and ¥ 3,300 in Tokyo. The company's shares finished trading Wednesday in Tokyo at ¥ 4,135.

Line is owned by South Korean internet company Naver Corp. and makes most of its revenue from games, sales of digital stickers and advertisements in Japan. It is also the dominant messaging app in Thailand and Taiwan, and is No. 2 after BlackBerry Messenger in Indonesia, where it is making a big marketing push.

But its monthly active user count has been plateauing in recent quarters. Line said it now had 220 million users, up only 2 million from the previous quarter. And while revenue rose to more than (Yen)120 billion last year from about (Yen)40 billion in 2013, it has posted net losses in two of the past three years.

To diversify, Line has been adding functions including taxi-hailing, mobile payments, and music and video streaming, though many of the features have yet to gain significant traction.

Line has said it was looking to use funds raised from its blockbuster IPO to build its presence in its four core markets by focusing on localizing its many services. It won't push into the U.S. or other new markets where messaging apps from Facebook Inc. and others dominate, chief executive Takeshi Idezawa has said.

Write to Alexander Martin at [e-mail]

(END) Dow Jones Newswires

July 27, 2016 03:15 ET (07:15 GMT)

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