SM Entertainment reported a disappointing performance for the third quarter of this year, attributed to a decrease in domestic album activities by its artists. The company plans to rebound in the fourth quarter and the first quarter of next year with a strong lineup of new releases and large-scale global tours.
On November 4, SM announced that its consolidated revenue for the third quarter reached 291.1 billion won, with an operating profit of 35.5 billion won. These figures represent declines of 9.5% and 26.4%, respectively, compared to the same period last year. The net profit turned to a loss due to foreign exchange losses stemming from the strengthening of the won.
On a separate basis, the company reported revenue of 173.4 billion won (down 22.8% year-on-year), operating profit of 28.4 billion won (down 29.2%), and net profit of 11.1 billion won (down 65.7%). SM explained, "To strengthen our global fandom, we strategically conducted overseas and small-scale performances, which led to a relative decrease in domestic album activities, resulting in declines in album, digital music, and concert revenues, as well as operating profits from some subsidiaries."
In contrast, the advertising and event segments, along with the merchandise and licensing sectors, showed positive results. Revenue from planned merchandise sales and IP collaborations increased by 21.3% and 23.5%, respectively, reaching 29.2 billion won and 62.1 billion won compared to the previous year. Among subsidiaries, Dear U recorded an operating profit of 9.2 billion won (+5.6%), continuing its growth, while Dream Maker and KeyEast successfully turned a profit. However, SM C&C and SM Life Design Group saw a decline in profitability.
SM aims to recover its growth trajectory in the fourth quarter and the first quarter of next year by launching a diverse lineup of artists. In the fourth quarter, following the releases of NCT WISH and RIIZE, new albums from NCT DREAM and Taeyeon, a mini-album from the EXO unit (Kai & Sehun), and a Japanese single from Yunho will be released. In the first quarter of next year, new albums from RIIZE, Jaehyun, and Seulgi, along with a mini-album from Hearts2Hearts, a group single from Super Junior-83, and a Japanese single from NCT JNJM will be unveiled.
The scale of global concerts will also be significantly expanded. NCT WISH, which sold out its first solo concert at Gocheok Sky Dome, and aespa, which successfully completed its North American tour, will embark on a European tour covering nine cities, including Paris and London. Additionally, major artists will actively perform worldwide, including NCT 127's fifth tour, EXO's encore concert, WayV's China tour, and solo tours by Changmin, Minho, and Yesung.
SM stated, "Starting early next year, we will continue the growth momentum through new releases and global activities of our major artists, while also expanding the activities of legacy artists and entering new markets with younger artists to build a balanced IP portfolio."
* This article has been translated by AI.
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