SM Entertainment Reports Q2 Operating Profit of 24.7 Billion KRW, Down 30.6% YoY

Sales of 253.9 Billion KRW, Up 5.9% Year-on-Year

SM Entertainment announced on the 7th that it recorded consolidated sales of 253.9 billion KRW and an operating profit of 24.7 billion KRW for the second quarter of this year. Compared to the same period last year, sales increased by 5.9%, while operating profit decreased by 30.6%. Net profit for the period was 8.4 billion KRW, down 70.3% from the same period last year, and the operating profit margin fell by 5.1 percentage points to 9.7% compared to the previous year.

Sales growth was driven by new album sales, concert revenue, and merchandise (MD) sales. Operating profit declined due to an increase in produced content volume and operating losses from subsidiaries.

In the second half of the year, active promotions by SM artists are planned. In the third quarter, starting with the release of NCT 127’s full-length album, aespa and RIIZE will release their first Japanese singles.

Additionally, SM’s first UK boy group, 'DEAR ALICE,' produced in collaboration with the British entertainment company MOON&BACK, will make its local debut through the TV series "Made in Korea: The K-Pop Experience," which will be broadcast this month on the UK’s public broadcaster BBC. New releases from NCT WISH, SHINee’s Key, and NCT Jaehyun’s first solo album are also scheduled.

SM’s first-ever virtual artist, nævis, is also preparing for debut, and in the fourth quarter, NCT DREAM’s full-length album, mini-albums from Taeyeon and aespa, as well as the debut of a new rookie girl group, are planned.

Furthermore, in the fourth quarter of this year, a ‘Trot Idol’ group composed of five talented individuals including Mr. Trot contestants, K-Pop trainees, and actors will be formed, with their growth story to be showcased through Korean and Japanese TV programs. After the TV program concludes, a nationwide tour concert is planned. The company also aims to debut a new male rookie team next year.

Jang Cheol-hyuk, Co-CEO of SM, stated, “We are expanding music genres such as classical, R&B, and trot, and extending our IP not only in Asia including Japan and China but also in English-speaking markets. We will realize IP expansion through various formats such as a multi-production system and both in-house and external labels.”