Naver has effectively moved to cut its losses on "Elang Mahkota Teknologi (Emtek)," an Indonesian comprehensive media corporations in which it invested about 170 billion won in 2021. Contrary to its initial expectations, as Emtek continued to underperform, Naver has been reducing its equity every year.
According to a compilation of ChosunBiz reporting on the 23rd, Naver disposed of about 10.9% (65,419,700 shares) of its 599,976,856 Emtek equity last year. Initially, in Mar. 2021, Naver made a $150 million (about 170 billion won) strategic investment in Emtek and secured 1.79% (1,111,258,956 shares) equity. As of the end of last year, Naver held 534,557,156 remaining Emtek shares, down about 52% from the first investment.
Emtek is Indonesia's largest comprehensive media platform corporations, founded in 1983. It owns Indonesia's representative over-the-top (OTT) platform "Vidio," as well as the nation's No. 1–2 terrestrial channels and regional terrestrial channels. Emtek is engaged in various content production and distribution businesses and, beyond media, entertainment, and content, also runs a range of tech-focused businesses such as simple payment, commerce, and IT solutions like cloud.
At the time of the initial investment, Naver accelerated its Southeast Asia business through "Line Webtoon," which ranked No. 1 in webtoon platform revenue in Indonesia and Thailand, and the messenger service "Line," which had 81 million users in Southeast Asia. Explaining the reason for the strategic investment then, Naver said it was an investment "to discover and seek new long-term growth opportunities in Southeast Asia, including Indonesia," adding it "judged there to be many touchpoints with Naver, which is targeting the global market in content, including webtoons, and cloud."
But Emtek's performance diverged from expectations. Emtek's 2021 revenue was 12,840.7 billion rupiah, but the following year it fell 23% year over year to 9,846.1 billion rupiah. Operating profit was 1,356.2 billion rupiah in 2021, but posted a 200.8 billion rupiah loss in 2023. In 2024, it recovered somewhat to 12,233.3 billion rupiah in revenue and 1,006.0 billion rupiah in operating profit. Naver had expected touchpoints with Emtek in content and cloud, but there were no notable results.
In the end, Naver lowered its Emtek equity ratio every year starting the year after the first investment. It fell to 1.48% at the end of 2022 and dropped below 1% in 2023. By the end of last year, it had been reduced to around 0.87%.
The industry believes that although equity remains, Naver has effectively moved to cut its losses on Emtek. A securities industry official said, "It sold equity every year and still holds some, so it is hard to pre-judge the investment outcome, but so far it appears to have taken a loss of roughly in the 30 billion won range."
A Naver official said, "After the investment was made as part of exploring the Indonesian market, local market conditions deteriorated, and some equity was sold as part of portfolio rebalancing."