SEOUL, August 07 (AJP) - CJ ENM's second-quarter operating profit rose even as revenue declined, as a turnaround in its media platform business and stronger commerce earnings offset a sharp slump in film and drama
Operating profit rose 16.9 percent from a year earlier to 33.4 billion won, topping the FnGuide consensus of 31.1 billion won by roughly 7.6 percent and rebounding sharply from just 1.5 billion won in the first quarter.
The operating margin widened to 2.8 percent from 2.2 percent a year earlier and 0.1 percent in the previous quarter.
Revenue fell 8.3 percent to 1.203 trillion won, missing the 1.264 trillion won consensus by about 4.8 percent. The main drag came from film and drama, while media platform, music and commerce all posted revenue growth.
Operating expenses fell 8.9 percent, slightly faster than revenue, with cost of sales down 14.6 percent.
Film and drama revenue plunged 53.7 percent to 190.2 billion won and fell 58.4 percent from the previous quarter. The division posted an operating loss of 10.5 billion won.
CJ ENM attributed the decline mainly to a gap in drama deliveries from Fifth Season, its U.S. production arm, which offset stronger overseas sales of Korean studio content.
Media Platform revenue rose 19 percent to 380 billion won, while the segment swung from a loss a year earlier to an operating profit of 11 billion won.
TVING continued to add subscribers on KBO baseball and original programming, while advertising revenue jumped 52.2 percent. Linear TV remained weak, however, with advertising revenue down 20.9 percent.
Music revenue increased 16.7 percent to 230.2 billion won on stronger album sales and global live events, but operating profit fell 36.4 percent to 10.9 billion won as spending on Mnet Plus and new artists increased.
Commerce remained the company's largest profit contributor. Revenue rose 4.4 percent to 402.8 billion won and operating profit climbed 21.2 percent to 26 billion won.
Mobile live commerce GMV surged 161.3 percent as short-form content helped attract new customers. Premium travel and kids products supported sales growth, while higher-margin health supplement and beauty categories helped profitability.
Net income fell 80.6 percent from a year earlier to 22.2 billion won, though the company returned to profit after posting a 6.1 billion won net loss in the first quarter.
CJ ENM said it plans to sustain TVING's growth in the second half, expand scripted-content sales overseas and step up new albums, tours and artist debuts in its music business.
Shares of CJ ENM were up 3.37 percent at 35,250 won as of 3 p.m. in Seoul trading.
AJP Takeaway:
- CJ ENM's second-quarter operating profit rose 16.9 percent year on year to 33.4 billion won, beating the FnGuide consensus of 31.1 billion won, even as revenue fell 8.3 percent to 1.203 trillion won.
- Media Platform swung to an 11 billion won operating profit as TVING subscriber growth and a 52.2 percent jump in advertising revenue helped offset continued weakness in linear TV advertising.
- Commerce remained CJ ENM's biggest profit contributor, with operating profit rising 21.2 percent to 26 billion won as mobile live-commerce GMV surged 161.3 percent and higher-margin health and beauty products supported profitability.
- Film and drama remained the main drag, with revenue plunging 53.7 percent to 190.2 billion won and the segment posting a 10.5 billion won operating loss, largely due to a gap in drama deliveries from U.S. production arm Fifth Season.
- CJ ENM plans to sustain TVING growth, expand overseas scripted-content sales and accelerate music releases and tours in the second half, while shares were up 3.37 percent at 35,250 won as of 3 p.m. Friday.
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