SM Life Design, Q3 Earnings Turnaround "Continuous Improvement"

Q3, Balanced Growth Across All Divisions Leads to 'Turnaround to Profit'
Continued Strong Performance Driven by Core Business and Dining-Out Demand
New Business 'Studio Imdae Business' Drives Strong Results

[Asia Economy Reporter Lee Seon-ae] SM Life Design's performance improvement trend is clear.

According to the Financial Supervisory Service's electronic disclosure system on the 31st, SM Life Design recorded a turnaround to profit in the third quarter compared to the same period last year, demonstrating a significant improvement in performance.

SM Life Design operates a wide range of printing production businesses, including SM Entertainment's albums and MD, as well as all logistics businesses including product storage and delivery. Through its subsidiary Beacon Holdings, it introduces various dining brands ranging from casual dining to fine dining and private dining for VIPs at 14 locations nationwide, leading a new dining culture unique to SM.

The improvement in SM Life Design's third-quarter performance was made possible by balanced growth across all business sectors. First, it stems from the external growth of SM Entertainment due to the growth of K-Pop. The increase in album sales and MD sales resulting from the expansion of fandoms of SM Entertainment artists led to improved performance in SM Life Design's printing production and logistics businesses.

In particular, the performance improvement in the dining business stood out, which is interpreted as continuous operational efficiency following the closure of deficit stores and escaping the impact of COVID-19 social distancing measures that lasted until the first half of last year.

This favorable performance trend is expected to continue into the fourth quarter and 2023. A representative of SM Life Design said, "External variables affecting SM Life Design's performance, such as SM Entertainment's core business and dining demand, remain positive, and a studio will be newly constructed on a newly acquired site for 11.5 billion KRW in 2022, adding a rental business."

SM Life Design's studio is located in Paju, which has good accessibility to Seoul, and on a 3,000-pyeong land site, a 12,000-pyeong construction site will be newly built for the studio and support facilities. The studio is expected to expand its role as an INNOVATION space where creators can come together, as well as providing infrastructure support for content creation by SM Entertainment and its subsidiaries.