CJ ENM’s Q3 OP more than halved on active original contents production

[Provided by Maekyung Media Group]

South Korean media and entertainment giant CJ ENM has seen third-quarter operating income was more than halved from a year ago due to a surge in original title production costs despite thriving contents and streaming business.

CJ ENM disclosed Tuesday that its consolidated operating income came to 25.5 billion won ($18.6 million) in the third quarter ended September, sinking 54.1 percent from previous quarter and 70.9 percent from a year earlier. Revenue was estimated at 1.19 trillion won, falling 1.2 percent on quarter but jumping 37.4 percent on year.

Net loss widened to 55.6 billion won from 25 billion won a quarter ago. A year earlier, the company posted a net income of 74.4 billion own.

Upon releasing the third-quarter earnings result, CJ ENM revised down its estimate on operating income for the fiscal 2022 to 155 billion won from 270 billion won projected in August. Projection on annual sales, however, is kept the same at 4.8 trillion won.

Still, CJ ENM shares rose 1.55 percent to 78,400 won in early Wednesday session.

The company owed the disappointing results to spike in investment in original movie and show titles.

Its media business delivered 609.9 billion won in revenue, up 37.7 percent on year, thanks to the stellar performance of its streaming service Tving, whose subscribers jumped 18.6 percent on quarter. Tving revenue climbed 81.6 percent on year, and contents sales a whopping 168.9 percent.

Commerce business posted 5.7 billion won in operating income and 309.5 billion won in sales.

Studio Dragon, a drama production and marketing and distribution company under CJ ENM, reported record sales of 228.9 billion won, up 97.2 percent on year in the third quarter. Operating income grew 29.9 percent on year to 18.9 billion won.

Its shares, however, fell 4.6 percent to 66,100 won on Wednesday morning, snapping its two-day winning streak.

By Kim Je-gwan, Oh Dae-seok and Cho Jeehyun