Nexon withholds shareholder dividends to "review and execute effective investments"

Revenue was up and operating income down for Nexon according to the company's second quarter financial report, and it announced it won't be paying dividends to shareholders for the previous fiscal year.

Thee South Korean games company saw a revenue increase of two per cent year-on-year, while also suffering a parallel decline in operating income of two per cent for quarter ending June 30, 2018.

Although earnings per share was up from $0.20 to to $0.33, Nexon announced that its board of directors has decided not to pay dividends of surplus to its shareholders.

In a statement, Nexon said it planned instead to "review and execute effective investments for proactive business development for future growth", such as expanding existing business, development of new opportunities, mergers and acquisitions, or acquisitions of game publishing rights.

"Therefore, Nexon's policy is to suspend dividend payouts for the near future and retain the flexibility to continue our growth investments in our global operations," said the firm.

"As a result of careful reviews, we have decided not to pay out dividends of surplus for the fiscal year ended December 31, 2017 as well, based on this policy."

Meanwhile, operating income was down to $144 million from $146 million. Revenues for the period reached $430 million, up from $423 million compared to the same period last year.

The small increase was tempered by a two per cent decline in revenues on a constant currency basis -- a non-GAAP measure used to show performance unaffected by flucation in foreign currency exchange rates -- which would leave revenues down by over $8 million.

Nexon published an announcement regarding the difference between second quarter outlook and actual results, which noted that consolidated income before taxes outperformed predictions as the result of a foreign currency exchange gain worth $139 million.

As a result, net income reached $290 million for the quarter, $139 million of which was due to a foreign exchange gain on US dollar dominated cash deposits and account receivables. This represented a 66 per cent increase year-on-year, up from $175 million.

Driven by strong performance from MapleStory and Dungeon&Figher, PC remained Nexon's most profitable platform by a considerable margin, accounting for 77 per cent of games revenue, compared to 23 per cent generated by mobile.

Revenue from the platform was up by four per cent year-on-year to $333 million, while mobile revenue fell seven per cent from $104 million to $97 million.

The sharpest decline in mobile revenues was felt in the Japanese market, which fell by a 31 per cent year-on-year from $31 million to $23 million.

"Nexon's second quarter truly showcases the company's strength in live services and game operations as it validates our model," said Owen Mahoney, president and CEO.

"We are seeing continued growth in player numbers and revenues from our original IPs, Dungeon&Fighter and MapleStory, as well as strong early success indicators from a series of new titles.

"We're excited by the promising early results from several new titles, many of which are based on our original IPs, developed at Nexon.... While we don't deem a title truly successful until years after its launch, we're looking forward to deploying high-quality live service updates and events to keep our players engaged across all of our titles for years to come."