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SM Entertainment has celebrated a boost in sales thanks to albums and concerts, but it was not enough to improve the South Korean entertainment agency’s net income.
The agency behind K-Pop acts such as NCT 127, Aespa and more reported a 5.9% year-on-year increase in sales in Q2 of 2024 reaching KRW 253.9bn (£145m/$185m/€169m). However, gross profit fell for the consolidated business from KRW 83.2bn in Q2 last year to KRW 77.7bn, while operating profit amounted to KRW 24.7bn as opposed to KRW 35.7bn in 2023.
Net income fell to KRW 8.4bn in the second quarter compared to KRW 28.3bn, a 70.3% drop.
Meanwhile, Q2 saw an 86.1% year-on-year boost for concert sales, which totalled KRW 37.2bn.
NCT Dream held 15 international concerts, while SHINee performed three shows. RIIZE Fan Con also helped to boost concert sales with eight events. Seven NCT Wish fan meet-ups were held, and Aespa and Super Junior each performed two shows.
Parent company SM Entertainment’s core results were slightly stronger. Its operating profit increased to KRW 29.3bn from KRW 28bn, but its net income dropped by 22.5% from KRW 17.4bn to KRW 13.5bn.
“Consolidated operating profit decreased due to the increase in the amount of content produced and the deficit of some subsidiaries,” chief financial officer Jang Jeong-min told analysts during an earnings call, as reported by Music Business Worldwide.
“The fact that NCT Dream held a total of 15 large-scale performances in Korea, Japan, Thailand, Hong Kong, Singapore, and other Chinese countries was a major factor in the increase in concert sales,” Jang added.
Earlier this year, internet conglomerate Kakao was offered conditional approval from South Korea’s antitrust regulator to acquire a controlling stake in SM Entertainment.
However, this came before news emerged that prosecutors in South Korea were seeking a warrant to arrest Kakao founder Kim Beom-su after allegations that he manipulated the stock market value of SM Entertainment during last year’s bidding war with Hybe Co.
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