CJ ENM Q4 Operating Profit 58.7 Billion Won... Losses Continue

Operating Profit Up 787% YoY, Sales Down 14%
Despite Net Loss of 135.1 Billion Won, "Accelerating Turnaround"
Maximizing Revenue Through TVING, Fifth Season, and Music

CJ ENM's operating profit for the fourth quarter of last year reached 58.7 billion KRW, marking a 787.6% increase compared to the same period the previous year. Although net losses continue, CJ ENM stated that the pace of performance improvement through new growth and music sector businesses is accelerating.

On the 7th, CJ ENM announced that its consolidated financial statements showed sales of 1.2596 trillion KRW and operating profit of 58.7 billion KRW for the fourth quarter of last year. Sales decreased by 14.0% compared to the same period last year, while operating profit rose by 787.6% during the same period. Net loss for the period continued at 135.154 billion KRW.

Annual sales for last year were 4.368361 trillion KRW, down 8.8% from the previous year, and operating loss turned to 14.6 billion KRW. Net loss for the period continued at 399.579 billion KRW.

A CJ ENM representative said, "The turnaround is accelerating due to profit improvement in new growth businesses such as Fifth Season and TVING, as well as high growth in the music business sector," adding, "This year, we will focus on maximizing profitability through enhancing TVING's competitiveness, expanding premium content delivery by Fifth Season, and accelerating the global music business based on new intellectual property (IP)."

By segment, the Media Platform division posted profits for the second consecutive quarter, driven by the expansion of paid subscribers and strong overseas content sales through the online video service (OTT) 'TVING.' It recorded sales of 327.1 billion KRW and operating profit of 2.3 billion KRW in the fourth quarter. The burden of content amortization was eased by strengthening channel and platform joint programming strategies, and costs decreased due to enhanced integrated marketing among channels, OTT, and digital platforms.

The Film and Drama division recorded sales of 300.1 billion KRW and an operating loss of 5.3 billion KRW. However, with the resumption of delivery from the overseas studio 'Fifth Season,' which had been halted due to the US writers' and actors' strike, numerous films and documentaries were supplied to global OTT platforms. The global sales expansion of killer content reduced the deficit compared to the third quarter.

Zero Base One member Jang Ha-won / Photo by CJ ENM

The Music division posted sales of 256.7 billion KRW and operating profit of 35.4 billion KRW. Thanks to the strong performance of the group artist 'ZEROBASEONE,' whose mini-album 2 sold 2 million copies, and the Japanese group artist 'JO1' with their Asia tour, the division recorded its highest-ever operating profit. Additionally, the '2023 MAMA AWARDS' held at Tokyo Dome in Japan last year recorded the highest audience ever, showing strong performance in convention live sales.

The Commerce division recorded sales of 375.79 billion KRW. CJ ENM is establishing itself as a channel for exclusive new product launches through a one-platform strategy combining TV, mobile, and mobile live commerce.

CJ ENM plans to accelerate performance improvement this year by strengthening profitability in core businesses. They aim to restore content competitiveness through enhanced content production involving top-tier creators and continuous discovery of original anchor intellectual property (IP). In the music sector, they plan to introduce a new girl group and expand competitiveness as a global music entertainment company by broadening overseas live and convention bases.

TVING announced plans to improve profitability through business model diversification, including the introduction of Korea's first ad-supported subscription plan (AVOD) among OTT services. It also plans to strengthen its content library with original anchor IPs such as 'Transfer Love 3,' 'High School Mystery Club 3,' 'Crime Scene Returns,' and the '2024 KBO League.' Through this, it aims to maximize subscribers and traffic. TVING targets over 10 million monthly active users (MAU).

Fifth Season plans to deliver more than 25 films and documentaries this year, including 'Severance Season 2' and 'Nine Perfect Strangers Season 2,' to drive external growth and profitability expansion.

The Commerce division will implement the mobile-centered One Platform 2.0 strategy and expand collaboration with major brand companies. This will solidify its position as the first channel for new product launches. By actively expanding mobile live commerce, the brand subsidiary 'Brandworks Korea' plans to strengthen profitability by growing exclusive brands such as Rockport, Brooks Brothers, and Odens, for which it has secured licenses.