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| ▲ This undated file photo shows an exterior view of the Hybe building in central Seoul. (Yonhap) |
(LEAD) Hybe-Q1 earnings
(LEAD) Hybe reports sharp fall in Q1 operating profit amid BTS enlistment
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SEOUL, May 2 (Yonhap) -- Hybe, the K-pop powerhouse behind BTS, Seventeen and NewJeans, reported a sharp decline in its earnings for the first quarter of this year, with operating profit plummeting 72.6 percent from a year ago.
The downturn comes as all members of BTS are performing in their mandatory military service, creating a significant gap in the company's artist lineup.
According to Hybe, the company's operating profit for the first quarter totaled 14.4 billion won (US$11 million), a drop that was slightly steeper than the market estimate of 15.1 billion won by Yonhap Infomax, the financial data firm of Yonhap News Agency.
The K-pop company, which typically sees a seasonal slowdown in the first quarter, attributed the steep decline not only to the absence of activities from key artists like BTS but also to the cost associated with launching new groups.
Despite these challenges, Hybe emphasized that it had managed to maintain a profitable quarter due to what it described as "improved fundamental earnings strength."
Revenue also fell by 12.1 percent on-year to 360.9 billion won, while net income took a drastic hit, dropping 87.4 percent to just 2.9 billion won.
However, Hybe noted some positive developments, particularly from newer acts.
The company highlighted the successful debuts of TWS and ILLIT, whose album sales each topped 500,000 copies.
"This success helped mitigate some of the financial impacts from the hiatus taken by senior artists," it explained.
"While there were fewer releases of new albums in the first quarter, the company laid the foundation for stable performance thanks to digital music sales that generates consistent revenue. As a result, the proportion of digital music sales in Hybe's overall music and album sales for the first quarter rose to around 50 percent," the company added in a release.
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