SM Entertainment achieved its highest-ever performance in the third quarter of 2023
In the third quarter, SM reported consolidated operating profit of 50.5 billion KRW and revenue of 2,663 billion KRW. This represents a 70% and 12% increase, respectively, compared to the same period last year.
Both operating profit and revenue reached their quarterly highs, with a net profit of 842 billion KRW, a 189% increase from the previous year. The operating profit margin for the third quarter increased by 6.5 percentage points, reaching 19%.
Looking at it separately, the separate operating profit and revenue for the third quarter were 48 billion KRW and 1,887 billion KRW, respectively, marking a 77% and 40% increase compared to the previous year.
The net profit increased by 68% to 371 billion KRW. This outstanding performance in the third quarter was driven by the strong activities of NCT DREAM, aespa, and Red Velvet, including physical album and digital music sales growth and offline concerts.
On a subsidiary basis, Dream Maker’s operating profit increased by 38.4% compared to the previous year to 3.9 billion KRW, while SMC recorded an operating profit of 1.2 billion KRW, a 122% increase from the previous year. SM C&C saw a 20% decrease in operating profit to 900 million KRW, and KEYEAST reduced its operating loss to 400 million KRW from the previous year.
SM is expected to continue this strong trend in album and music sales in the fourth quarter of this year and the first quarter of next year. This includes comebacks from artists like NCT 127, WayV, RIIZE, aespa, and Red Velvet, as well as solo releases from Taeyeon and Ryeowook. Additionally, NCT 127 and TVXQ are set to release new music in December.
In the first quarter of next year, aespa plans to release a global English album as part of their efforts to expand their international promotions. New albums from NCT Dream and NCT’s new team are also in the works.
SM also aims to strengthen its music publishing business. In the short term, they plan to secure 80 songwriters under their subsidiary, Kreation Music Rights (KMR). They also intend to actively recruit overseas songwriters looking to enter the K-pop market by establishing local branches abroad.
SM’s CEO expressed confidence in the future, stating that they will continue to provide a diverse lineup of artists and content, with a focus on KMR to bring in global songwriters and make music sales a new source of revenue for SM.