South Korea’s SM Entertainment reported significant growth in album and concert sales, but weak performance at some of its subsidiaries hampered an improvement in its second-quarter earnings.
In earnings reports released on Wednesday (August 7), the companies behind famous K-pop music include NCT 127, EXO, Rize and Espa reported a Annual growth of 5.9% Sales surged in second quarter 253.9 billion won ($185.12 million Calculated based on quarterly average exchange rates).
However, the company’s operating profit decreased annually Annual increase of 30.7%arrive 24.7 billion won ($18 million) while net profit fell Annual growth of 70.3%arrive 8.4 billion won ($6.12 million).
“Consolidated operating profit declined due to an increase in content production volume and losses incurred by some subsidiaries,” the chief financial officer said. Zhang Zhengmin told analysts on an earnings call.
After excluding subsidiaries, the core company’s profits show steady sales growth and continue to rise. Annual increase of 25.4% arrive 174.1 billion won ($126.94 million), driven by a Annual increase of 31.9% The number of digital music/physical albums increased, and sales reached 71.7 billion won (US$52.28 million), and by Annual growth of 86.1% Concert sales surge, 37.2 billion won ($27.12 million).
Zhang attributed the nearly doubling of concert revenue to “the expansion of performance scale and the internationalization of performances.”[s]”Compared to last year.
“the fact is NCT dream A total of 15 large-scale performances were held in South Korea, Japan, Thailand, Hong Kong, Singapore and other Chinese countries, which was a major factor in the growth of concert sales.
Core company operating profit rises Annual increase of 4.6%arrive 29.3 billion won ($21.36 million). The core company’s net profit is 13.5 billion won (US$9.84 million), A 22.5% That was down from the same period last year, which the company attributed to an increase in income taxes.
SM Entertainment’s overall performance was dragged down by the poor performance of some of its subsidiaries.
Overall sales of major subsidiaries decreased Annual increase of 18.5%arrive 112.8 billion won (US$82.24 million). Subsidiary records operating loss 2.2 billion won ($1.6 million), the net loss is 6.5 billion won ($4.74 million).
The reason for this decline is Annual increase of 78.4% Live entertainment segment sales decline dream Makerwhich records 7.5 billion won In terms of sales, compared to 34.8 billion won The same quarter a year ago.
It is also worth noting that Annual growth of 5.3% sales drop SM C&CIt is a talent agency, television production and travel company, and is the largest source of revenue among SM’s subsidiaries.
company’s 27.9 billion won (US$20.34 millionSM said quarterly sales were lower than the same period last year due to lower sales of managed services and content.
“Dream Makers and Others [subsidiary] Due to the internationalization of performance, new… operating costs and declining performance in the U.S., companies are turning to deficits,” Zhang said on the earnings call.
Zhang highlighted a busy music schedule in the second half of 2024, which includes the release of NCT 127’s sixth full-length album last month, Walkand aespa’s new single released in Japan, hot chaos.
NCT Dream’s full album will be released in the fourth quarter of this year, NCT wishes (in Japan), TVXQ!and Minho.
Additionally, Jang highlighted SM artists’ current and upcoming tours, including aespa, the most recent of which launched in June and will feature 25 shows in Japan, Singapore, Australia, Macau and elsewhere.
At the same time, Riize plans to conduct 23 tours, focusing on Japan, Indonesia and China, while NCT Dream’s tour plans to land in North and South America in August, and in Europe in the fourth quarter, with 19 tours planned.
Notably, South Korean regulators approved SM Entertainment’s effective acquisition in Q2 kaco co., ltd.the South Korean telecom giant that owns the dominant messaging app KakaoTalk and music streaming services melon.
The approval came months before the arrest and indictment of Kakao’s founder Kim BeomsooAccused of participating in a conspiracy to manipulate SM Entertainment’s stock price in February 2023, when Kakao was engaged in a bidding war with the K-pop giant move Used to control SM.
The Korea Fair Trade Commission (KFTC) approved the acquisition on the condition that Kakao-owned Melon continues to distribute music by SM Entertainment rivals. It also ordered the creation of a monitoring body to ensure Melon does not engage in anti-competitive behavior.global music business
