(ANN/KOREA HERALD) – SM Entertainment reported a steep decline in its third-quarter earnings on Tuesday, citing lower album sales and increased production costs as primary factors. However, the company hinted at exciting developments ahead, including the debut of a new girl group in January.
According to the company’s regulatory filing, SM Entertainment recorded consolidated revenue of KRW242.2 billion (USD 175.6 million) and an operating profit of KRW13.3 billion. This marks a 9 per cent decrease in revenue and a significant 73.6 per cent year-on-year drop in operating profit. The decline is attributed to slower album sales, reduced earnings from key subsidiaries, and added production expenses for BBC’s documentary series “Dear Alice,” which spotlights SM’s first British boy group.
Standalone, SM Entertainment’s revenue was 172.1 billion won, with an operating profit of 27.1 billion won, down by 8.8 per cent and 43.6 per cent respectively from last year. While album and digital music sales faced a downturn due to high comparison figures, concert revenue saw a rise, boosted by an expanded lineup of concerts and related merchandise. Net income, however, plunged 56.8 per cent to KRW16 billion.
Despite these figures, SM Entertainment is focused on growth, scheduling a strong lineup of artist promotions for the fourth quarter and beyond. This includes the much-anticipated launch of its first girl group since aespa’s debut five years ago, aligning with the company’s “SM 3.0” roadmap aimed at intellectual property expansion. This roadmap has introduced new groups like Riize and NCT Wish, alongside projects featuring virtual artist Naevis.
Among its current stars, aespa recently released its fifth EP, Whiplash, following a successful year of releases led by Supernova. SM also has an extensive lineup of artist releases planned, including upcoming albums from Red Velvet’s Irene, WayV, and NCT U’s Yuta.
“SM is building a strong lineup of artist IP across all generations of K-pop,” said SM Entertainment CEO Jang Cheol-hyuk. “With new artist debuts and our well-loved teams, we aim to strengthen our roster further with a new girl group launching next year.”
In celebration of its 30th anniversary, SM is planning a range of commemorative projects, including an SMTown Live concert, an SMTown album, and special performances featuring stars like EXO’s Kai and Red Velvet’s Seulgi.
