"CJ ENM Secures Content Competitiveness but Faces Profitability Slump: Q2 Operating Profit 55.6 Billion KRW, Down 35.2% (Comprehensive)"

Operating profit in media sector 25.4 billion KRW...56.0% ↓, sales 722.8 billion KRW...58.4% ↑
Operating profit in commerce sector 19.5 billion KRW...34.7% ↓, sales 351.7 billion KRW...1.6% ↓
"Expanding global content influence...Focusing on strengthening business portfolio and profitability in second half"

[Asia Economy Reporter Yuri Kim] CJ ENM announced on the 4th that its consolidated operating profit for the second quarter of this year was 55.6 billion KRW, a decrease of 35.2% compared to the same period last year. During the same period, sales increased by 31.3% to 1.1925 trillion KRW. The company explained that although sales increased due to expanded content competitiveness and strengthened global business competitiveness, operating profit declined due to poor profitability.

The media division recorded an operating profit of 25.4 billion KRW, down 56.0%, and sales of 722.8 billion KRW, up 58.4%. It was explained that TV advertising maintained solid growth, increasing by 5.9% compared to the same period last year, driven by channel growth through strengthening the competitiveness of premium IPs such as "Our Blues," "Alchemy of Souls," and "Yumi's Cells Season 2." During the same period, content sales increased by 258.9%, and TVING sales also rose by 122.1%, driving sales growth. Premium content sales produced by Endeavor Content, acquired last year, nearly doubled (93.7%) compared to the previous quarter, contributing to the increase in media division sales.

In the second half of the year, the company plans to continuously expand global content sales including channel and OTT series, and strengthen digital channels such as "Diggle" and "Studio Waffle."

During this period, the commerce division’s operating profit was 19.5 billion KRW, down 34.7% from the same period last year. Sales were 351.7 billion KRW, a decrease of 1.6%. The decline in transaction volume and increased costs affected the profit margin. The company explained, "In the first half of this year, the reopening atmosphere intensified offline consumption concentration, and increased TV transmission fees and investment costs for future sustainable growth led to a decline in performance compared to the previous year." However, it also noted meaningful achievements such as an increase in mobile active users (MAU), growth in transaction volume of own brands, and digital sales.

In the second half, the company plans to focus on improving scale and profitability by strengthening a high-margin product portfolio including beauty and health functional foods. It will expand distribution channels for its own brands and maximize sales in the main fall/winter (FW) season for fashion products to recover transaction volume. The company will also continue to strengthen differentiated content commerce competitiveness through nurturing unique mobile live commerce IPs such as "Butina Life" and collaboration with the entertainment division on shows like "Get It Beauty" and "Street Man Fighter."

The music division recorded an operating profit of 14.8 billion KRW, an increase of 589.4%, and sales of 92.4 billion KRW, up 41.3%. Overseas business centered on the Japanese music label was fully launched, with the second mini-album "I" by its own artist "INI" and the second full album "KIZUNA" by achieving No. 1 on the Oricon chart. Live sales increased with events such as "KCON: WORLD PREMIER" and domestic concerts by Lim Young-woong and ATEEZ, driving profitability growth.

The film division recorded an operating loss of 4.1 billion KRW and sales of 25.6 billion KRW in the second quarter. Although "Broker" and "Decision to Leave" won awards at the Cannes Film Festival and overseas sales performed well, the division posted an operating loss due to poor domestic box office performance.

A CJ ENM official said, "In the first half of the year, CJ ENM continuously expanded its content influence in global markets including the United States, and the music business strengthened overseas artist activities centered on Japan, securing global business competitiveness. In the second half, we will focus on improving profitability based on unique content competitiveness and strengthening our business portfolio."