K-pop companies’ earnings are ‘Up&Down’ in second quarter

K-pop companies reported mixed second-quarter earnings as JYP Entertainment and YG Entertainment fended off economic uncertainties by selling concert tickets and subsidiaries, while SM Entertainment shrunk due to selling a subsidiary last year.

JYP Entertainment’s net rose, YG Entertainment turned around from a deficit, and SM Entertainment’s net fell compared to the previous year.

JYP Entertainment, the second largest K-pop company by market cap and home to girl group Twice, posted a 15.1-billion-won ($11.5 million) net profit during the April-to-June period. It was 214.9 percent higher than the year prior but below the 16-billion-won consensus compiled by FnGuide.

Revenue came in at 67.7 billion won, up 67.1 percent on the year and higher than analyst expectations of 65.1 billion won. Operating profit was also higher than the market consensus, standing at 24.2 billion won.

JYP’s strong performance was credited to the concert ticket sales from the world tours of girl group Twice and boy band Stray Kids, along with the 600,000 copies of albums sold by Twice member Nayeon’s solo album that was released on June 24.

Girl groups Twice and ITZY will each release a new EP, and boy band Stray Kids will release a digital single in the third quarter. Twice will additionally roll out a Japanese full-length album by the end of September.

YG Entertainment reported a consensus-beating 8.6 billion won in net profit, turning around from the 1.6-billion-won loss from the same period last year.
 
However, the turnaround was not from its artists but from selling its golf subsidiary Greenworks for 18.8 billion won in April.
 
The company, agency of K-pop bands Blackpink and Big Bang, had only one newly-released album during the second quarter from its boy band iKON. Revenue decreased by 9.1 percent year on year, standing at 76 billion won in the second quarter of this year. Operating profit also fell by 10.7 percent on year to 9.3 billion won.
 
Analysts forecast a sunnier third quarter with Blackpink making a comeback for the first time in two years on Sept. 16 with the full-length album “Born Pink.” The band will embark on a world tour starting in October.

SM Entertainment posted a decrease in revenue, net, and operating profit due to a smaller number of artists releasing new titles compared to the previous year.

The company, home to groups aespa and NCT, posted 25.4 billion won in net profit, higher than the 14.8-billion-won consensus but 67.8 percent lower than the second quarter of last year. Revenue came in at 184.4 billion won, down 1.1 percent on the year, and operating profit at 19.7 billion won, a 28.4 percent decrease on year.

The net decrease was due to a reversed base effect after selling shares of its subsidiary Dear U for 66.2 billion won in April last year, according to SM Entertainment.

Third quarter earnings are likely to improve, as the company released albums from aespa and Super Junior last month and Girls’ Generation on Aug. 8.

“K-pop albums are expected to reach record sales volumes again this year,” said Lee Hwan-wook, an analyst at IBK Securities. “Entertainment companies with rich artist portfolios are expected to bounce back in the latter half of the year.”

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]