HYBE profit plummets as BTS hiatus stretches on

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HYBE profit plummets as BTS hiatus stretches on

Published: 02 May. 2024, 15:58

LEE JAE-LIM
lee.jaelim@joongang.co.kr

HYBE's headquarters in Yongsan District, central Seoul [NEWS1]

HYBE reported a lower-than-expected operating profit of 14.4 billion won ($10.43 million) for the first quarter of this year due to BTS's hiatus and upfront costs related to debuts of rookie groups, the K-pop agency said on Thursday.

The figure nose-dived 73 percent on year, underperforming the market consensus of 17.2 billion won compiled by market tracker FnGuide.

Quarterly revenue sank 12 percent to reach 360.9 billion won, falling under the market expectation of 380.4 billion won.

Net profit swung black to 2.9 billion won, landing far below the analyst forecast of 25.4 billion won.

HYBE evaluated the first quarter to be an offseason due to its lack of concerts and the seven members of star-studded boy band BTS being in the midst of their mandatory military duties. The successful debuts of its rookie groups TWS and ILLIT helped to offset costs.

Businesses involving artist engagement such as album, concert and advertising deals accounted for 217 billion won, or 60 percent of total revenue. Concert ticket sales for Seventeen, Enhypen and &TEAM were big contributors.

Businesses indirectly involving artist engagement such as merchandise sales, licensing deals and fan club membership fees made up the other 40 percent of total revenue, or 143.9 billion won.

HYBE projected both its revenue and operating profit to improve in the next quarter as an array of its artists resume their activities. Boy bands Seventeen, Tomorrow X Together and BoyNextDoor released EPs last month and other groups such as Enhypen and NewJeans are scheduled to make comebacks in May.

Jin of BTS, who was the first of the septet to enlist in the military, will complete his service in June.

HYBE’s highly anticipated rookie group Katseye is also set to debut this summer, targeting the U.S. market.

HYBE did not take questions during its earnings call related to its ongoing dispute with subsidiary label ADOR, briefly commenting that “legal procedures are under way.”

HYBE said on April 25 that it would report Min Hee-jin to the police on allegations that the ADOR CEO had attempted to seize management control of the subsidiary from HYBE.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]