CJ ENM announced on the 11th that it recorded sales of 957.3 billion won and operating profit of 49.6 billion won in the first quarter of 2022 on a consolidated basis for Korean International Accounting (K-IFRS). Sales increased 20.9% YoY, while operating profit fell 47.0% due to sluggish profitability.
Sales of the media division recorded 546.4 billion won, up 41.5% from the same period last year, and operating profit decreased 38.2% to 33.3 billion won. TV advertisements increased by 8.1% compared to the same period last year, maintaining solid growth thanks to the strong viewer ratings of popular programs such as ‘Twenty-five Twenty One’, ‘Doberman of Military Prosecution’ and ‘Somehow the President 2’.
Digital sales continued high growth, up 55.8% from the same period last year. The performance of Endeavor Contents, which it acquired last year, is also linked, recording significant sales growth. Profitability recovery fell short of expectations as production costs increased due to the expansion of Teabing original content, delays in the production and release of some Endeavor content, and one-off costs were reflected.
In the second quarter, we plan to focus on expanding our channel and digital market share by strengthening content competitiveness. It plans to strengthen its core content lineup such as ‘Our Blues’, ‘Backpacker’, and ‘Queendom 2’, and expand advertisers through channels such as ‘tvN STORY’ and ‘tvN SPORTS’. Teabing is a strategy to expand the number of paid subscribers and accelerate growth by focusing on content genre diversification and franchise IP.
The commerce division recorded sales of 317.3 billion won, operating profit of 12.9 billion won, and billings of 911.1 billion won. Earnings declined compared to the previous year due to temporary factors such as an increase in fixed costs including TV transmission commissions and a delivery strike. However, billings for in-house brands centered on fashion and living increased by 30% compared to the previous year, and the proportion of digital billings to total billings also increased.
In 2Q, billings and profitability are expected to improve thanks to revitalization of consumption in fashion, beauty, and travel following the re-opening and performance of new brands such as ‘Kolmar’. In addition, the company plans to focus on strengthening competitiveness for future growth, such as launching a vertical platform specializing in women’s fashion and commerce with unique contents through full-fledged collaboration with the entertainment sector.
Sales of the music division increased by 27.7% year-on-year to KRW 66.6 billion, and operating profit increased by 107.0% to KRW 12.9 billion. Sales of popular artists’ albums increased, with sales of the debut album ‘Kep1er’ and the repackage album ‘ENHYPEN’, which were created through the ‘Girls Planet 999’ program. The global fandom of its own artists such as ‘INI’ and ‘JO1’ also expanded, leading to growth in global sales and profitability.
In the second quarter, ‘KCON 2022 Premiere’ will be held one following another in Seoul, Tokyo, and Chicago, and the global activities of ‘INI’, ‘JO1’ and ‘TO1’ will resume. New album releases of ‘Davichi’ and ‘Jo Yuri’ and ‘Lim Young-woong Concert’ are also expected to contribute to sales growth.
In the film division, operating losses continued due to a sales vacancy due to the absence of theater releases and musical performances and a decrease in supplementary rights sales. Although the first quarter recorded sales of 27 billion won and operating loss of 9.4 billion won, earnings are expected to improve in the second quarter thanks to the theater re-opening and box office recovery. It plans to release major works by the third quarter, such as Hirokazu Koreeda’s ‘The Broker’, director Park Chan-wook’s ‘Decision to Break Up’, and the first part of ‘Alien + Human’ directed by Choi Dong-hoon, which entered the competition section of the Cannes International Film Festival.
An official from CJ ENM said, “We will greatly expand world-class IP through joint planning and co-production of multi-studio and collaboration with global partners. We will solidify our growth.”