Nexon earns $284 mil on foreign exchange gains Korean gaming giant benefit from weakening won
Translated by Kim So-in 공개 2021-11-11 07:39:55
이 기사는 2021년 11월 11일 07:35 더벨 유료페이지에 표출된 기사입니다.South Korea’s Nexon has earned more than 336 billion won ($284 million) on foreign exchange gains during the first nine months of this year, the largest ever in the company’s history, thanks to the prospects for the U.S. Federal Reserve tapering.
The South Korean gaming giant said on Wednesday that it generated an income before income taxes of 125.8 billion yen (1.31 trillion won) on a consolidated basis during the first nine months of 2021, topping its own estimates of 98.3 billion-103.5 billion yen.
The better-than-expected financial results are attributable to foreign exchange gains, which amounted to 33.2 billion yen, or 346 billion won. This means that about 26% of income before income taxes was one-off gains from exchange rate fluctuations.
Nexon is listed on the Tokyo Stock Exchange. NXC is the holding company of Nexon and based on Jeju Island. Nexon’s subsidiaries include Neople, Nexon Korea and other overseas units.
Nexon owns various assets denominated in foreign currencies, such as won, yen, and dollar. As the company doesn’t use a hedge strategy to manage currency risk, foreign exchange rate fluctuations have a direct impact on its assets and income. The company suffered a foreign exchange loss of 8.64 billion yen as of September 2021.
The Korean won continues weakening against the U.S. dollar and the Japanese yen. The won weakened from 1,010.58 won per 100 yen at the end of May to 1,085.54 won per 100 yen in September.
Against the U.S. dollar, the Korean currency declined from 1,081.50 won in January to the level of 1,190 won at the end of September. Nexon earned 16.1 billion yen in profits from dollar deposits during the third quarter alone.
The U.S. dollar has continued gaining ground against the Korean won this year due to the expectations that the Fed will begin paring the pace of its Treasury and mortgage bond buying, which has amounted to $120 billion a month. If the U.S. adopts a tighter monetary policy, there will be fewer dollars in circulation and the dollar will gain value. (Reporting by Choong-hee Won)
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