HYBE and SM Entertainment Anticipate Rebound in Q4 Amid Sharp Decline in Q3 Operating Profit

HYBE and SM Entertainment, two leading entertainment companies in Korea, experienced a significant decline in their operating profits in the third quarter of 2024. Both companies acknowledge the need for revenue improvement and are raising expectations for a rebound in Q4 by announcing comebacks of their artists and the debut of new idol groups.

HYBE recently reported its third-quarter earnings, with an operating profit provisionally estimated at 54.2 billion KRW, marking a 25.4% decrease compared to the same period last year. Revenue fell by 1.9% to 527.8 billion KRW, and net profit plummeted by 98.6% to 1.4 billion KRW. HYBE faced several challenges in recent months, including a management dispute with former ADOR CEO Min HeeJin and controversies surrounding BTS Suga. However, HYBE is optimistic about the fourth quarter with multiple comebacks planned for their artists and a full BTS album scheduled for next year, anticipating a recovery in performance. Global events, such as the Olympics, have impacted album releases, and the completion of initial infrastructure for new business ventures is expected to aid in recovering the operating profit margin.

Similarly, SM Entertainment faced a comparable downturn. SM Entertainment’s operating profit for Q3 was estimated at 13.3 billion KRW, a 73.6% decrease from the previous year. Revenue decreased by 9% to 242.2 billion KRW, and net profit dropped by 95.6% to 3.7 billion KRW. SM attributed the fall in operating profit to increased personnel due to the establishment of a multi-production system and rising initial operating costs for new subsidiaries.

SM Entertainment plans comebacks for its artists in Q4 and early next year, with activities scheduled for popular idol groups like aespa and NCT Dream. Additionally, a new girl group, the first in five years since aespa, is set to debut early next year. Co-CEO Jang CheolHyeok stated that the debut of the new girl group would strengthen their artist lineup.

The industry is watching closely to see if HYBE and SM Entertainment can improve their performance through active artist activities and strengthen their positions within the entertainment sector.

This article has been written by Kpopmap AI writer and while we have made efforts to ensure the accuracy of the article, there may be errors or inaccuracies.