SEOUL, South Korea, Feb. 15 /Xinhua-PRNewswire-FirstCall/ -- 2007
4Q Results Summary (Unit: KRW mm) 07.Q4 07.Q3 QoQ 06.Q4 YoY Revenue
6,964 7,556 -7.8% 5,348 30.2% Operating Expenses 10,617 11,146
-4.7% 11,181 -5.0% Operating Profit Loss Loss -3,653 -3,590
increase -5,834 decrease Ordinary Profit 2,500 -2,585 Turn over
-3,804 Turn over Ordinary Profit Margin 35.9% -- -- -- -- Net
Income 2,073 -3,265 Turn over -10,876 Turn over Revenue During 4th
quarter, we recorded a 6.9 billion KRW revenue and 3.6 billion KRW
operating loss. Total operating expenses decreased 4.7% to 10.6
billion KRW due to the reduction of marketing costs, however,
operating loss increased 1.8% compared to previous quarter because
of the revenue decrease. Ordinary Profit increased 196.7% due to
the partial disposal of GameOn shares and tangible asset, and Net
Income was 2.0 billion KRW. 2007 Q4 Revenue Breakdown (Unit: KRW
mm) 07.Q4 07.Q3 QoQ 06.Q4 YoY Revenue 6,964 7,556 -7.8% 5,348 30.2%
Domestic 4,523 4,933 -8.3% 4,692 -3.6% Overseas 2,430 2,614 -7.0%
648 275.0% Other 11 9 22.2% 8 37.5% Domestic revenue decreased 8.3%
to 4.5 billion KRW. With regular updates, MU and SUN have been
showing signs of stabilization in Korea, and we will try to keep
the revenue at the current level. Overseas royalty decreased 7% to
2.4 billion KRW from previous quarter and revenue. Domestic Revenue
Breakdown (Unit: KRW mm) 07.Q4 07.Q3 QoQ 06.Q4 YoY MU 3,838 4,057
-5.40% 4,340 -11.57% Individual 3,107 3,235 -3.96% 3,335 -6.84%
Internet Cafe 731 822 -11.07% 1,005 -27.26% SUN 685 876 -21.92% 352
94.32% Individual 428 522 -18.20% 254 68.11% Internet Cafe 257 353
-27.20% 98 162.24% Total 4,523 4,933 -8.31% 4,692 -3.60% MU
individual revenue decreased 3.96% to 3.1 billion KRW and internet
cafe revenue decreased 11.7% to 7million KRW. SUN's revenue,
including internet cafe revenue, was 685 million KRW. SUN internet
cafe revenue was slow due to the partial subscription model (micro
transaction model) and high competitive market of MMORPG. Overseas
Royalty Revenue Breakdown (Unit: KRW mm) 07.Q4 07.Q3 QoQ 06.Q4 YoY
MU 870 817 6.5% 648 34.3% China 141 123 14.6% 67 110.4% Taiwan 107
100 7.0% 105 1.9% Japan 498 482 3.3% 390 27.7% Philippines 42 41
2.4% 58 -27.6% Vietnam 11 14 -21.4% 8 37.5% U.S 68 54 25.9% 17
300.0% Singapore 3 3 0.0% 3 0.0% SUN 1,560 1,797 -13.2% 0 -- Taiwan
178 171 4.1% 0 -- China 1,072 1,626 -34.1% 0 -- Japan 310 -- -- 0
-- Total 2,430 2,614 -7.0% 648 275.0% MU's overseas royalty revenue
increased 6.5% to 870 million won. MU China revenue has increased
since the microtransaction model change. SUN's overseas royalty
revenue during fourth quarter was 1.5 billion won. Total Operating
Costs (Unit: KRW mm) 07.Q4 07.Q3 QoQ 06.Q4 YoY Total Operating
10,617 11,146 -4.7% 11,181 -5.0% Costs Labor Costs 5,224 5,645
-7.5% 5,489 -4.8% Depreciation 470 450 4.4% 773 -39.2% Commission
Paid 1,693 1,770 -4.4% 1,485 14.0% Marketing Expenses 620 855
-27.5% 881 -29.6% Sales Commission 133 154 -13.6% 254 -47.6% Other
2,477 2,272 9.0% 2,299 7.7% Total Operating Expenses Labor costs,
which constitute about 49% of our total operating costs, decreased
7.5% to 5.2 billion KRW. As of end of 4th quarter, our total
headcount decreased to 477, from 536 end of third quarter. YoY,
headcount decreased by 172 people. Depreciation increased 4.4% to
470 million KRW, due to the increase in equipment for SUN's
service. Sales Commission decreased 13.6% to 133 million KRW.
Commission paid decreased 4.4% to 1.6 billion KRW. As a result of
minimizing unnecessary marketing expenses, marketing expenses
decreased 27.5% to 620 billion KRW. Other costs were 2.4 billion
KRW, which was similar to 3rd quarter. Non-operating Items (Unit:
KRW mm) 07.Q4 07.Q3 QoQ 06.Q4 YoY Non-operating Income 6,153 1,005
512.2% 2,030 203.1% Interest Income 886 894 -0.9% 975 -9.1% Profit
(Loss) on Foreign Exchange 109 -22 595.5% -108 -200.9% Gain on
Equity Method -1,342 -829 61.9% -1,192 12.6% Gain on disposal of
Marketable Securities 2,540 859 195.7% 2,321 9.4% Other 3,960 103
3744.7% 34 11547.1% Although interest income decreased due to the
decrease in our cash balance, with the increase of loss in equity
method of 1.3 billion won and the increase in gain on disposal of
marketable securities, we recognized a 6.1 billion non- operating
profit during fourth quarter. As of end of fourth quarter, cash,
cash equivalents, and marketable securities were 74.5 billion won.
This was due to the improvement of our cash flow related to the
sale of our treasury stock trust fund to Woori Investment
Securities and the disposal of tangible assets. Equity Method
(Unit: KRW mm) 07.Q4 07.Q3 QoQ 06.Q4 YoY 9Webzen -322 -59 -- -396
-- Webzen Taiwan -665 -1 -- -19 -- Webzen China 0 -212 -- -16 --
Webzen America -355 -557 -- -761 -- Total -1,342 -829 -- -1,192 --
We recognized a 1.3 billion KRW loss on equity method from our
overseas subsidiaries. FY 2007 Earnings Summary (Unit: KRW mm) 2007
2006 YoY Revenue 28,215 21,950 28.5% Operating Profit -13,999
-30,115 Loss decrease OP Margin -- -- -- Ordinary Profit -6,957
-30,115 Loss decrease Net Income -9,536 -31,519 Loss decrease Year
2007 revenue increased 28.5% YoY to 28.2 billion KRW, and operating
loss was 13.9 billion KRW. FY 2007 Revenue Summary (Unit: KRW mm)
2007 2006 YoY Revenue 28,215 21,950 28.5% Domestic 19,598 17,946
9.2% Individual 14,774 13,480 9.6% Internet Cafe 4,824 4,395 9.8%
Other 55 71 -22.5% Overseas 8,562 4,004 113.8% Domestic revenue
increased 9.2% YoY to 19.5 billion KRW, and overseas royalty
revenue increased 113.8% to8.54 billion KRW. FY 2007 Expense
Summary (Unit: KRW mm) 2007 2006 YoY Labor cost 21,610 24,186
-10.7% (R&D cost) 6,431 9,027 -28.8% Marketing cost 1,948 8,431
-76.9% Commission paid 6,404 5,988 6.9% Depreciation 1,973 2,609
-24.4% Year 2007 Labor costs decreased 10.7% to 21.6 billion KRW.
Marketing costs decreased 76% to 1.9 billion KRW, associated with
the decrease in MU and SUN marketing and continue to minimize
marketing costs through effective marketing activities. Commission
paid and depreciation during 2007 was 6.4 billion KRW, and 1.9
billion KRW respectively. 2008 Guide Line (Unit: KRW mm) FY2007
2008(E) YoY Revenue 28,214 41,004 45% Operation Profit -13,999
4,000 Turn over Year 2007 revenue was 28.2 billion won and expected
to increase 45% to 41.0 billion won in 2008. And Operation Profit
will be turn over to Black ink. During the 2008, three titles will
be commercialized including Huxley and operation cost will be
decreased due to the efficient management system and budget
controlling. Forward-Looking Statements: Certain statements in this
document may include, in addition to historical information,
"forward-looking statements" within the meaning of the "safe-
harbor" provisions of the U.S. Private Securities Litigation Reform
Act of 1995. Forward-looking statements can generally be identified
by the use of "estimate," "anticipate," "believe" "project," or
"continue" or the negative thereof or other similar words, although
not all forward-looking statements will contain these words. These
forward-looking statements are based on our current assumptions,
expectations and projections about future events. All actual
performance, financial condition or results of operations to be
materially different from those suggested by the forward-looking
statements, to collect, and in a timely manner, license fees and
royalty payments from or operate commercially successful online
games; our ability to compete access technological developments in
our industry; our ability to recruit and strategies; and economic
and political conditions globally. Investors should consider the
information contained in our submissions and filings with the
registration statement on Form F-1, as amended, and our annual
report on Form 20-F, together with such other documents and we may
submit to or file with the SEC from time to time, including on Form
6-K. The forward-looking statements reflect new, changing or
unanticipated events or circumstances. Contacts: Webzen Inc.
Donghoon Lee Investor Relations Tel: +82-2-3498-6818 Email:
DATASOURCE: Webzen Inc. CONTACT: Donghoon Lee of Webzen Inc.,
+82-2-3498-6818,
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