SM Entertainment (041510) Q4 2022 earnings summary

Executive summary

• 4Q22 consolidated revenue rose 18.2% YoY to KRW 2,564억 and operating income increased 70.3% to KRW 252억; net income fell 72.7% to KRW 90억, partly due to a 4Q21 property-sale gain.

• Standalone revenue grew 25.8% YoY to KRW 1,511억 and operating income rose 73.0% to KRW 244억.

Financial highlights

• Consolidated gross profit was KRW 851억, up 18.4% YoY; selling, general and administrative expenses were KRW 599억, up 4.9%.

• Consolidated pretax income was KRW 135억, down 71.2% YoY; income tax expense was KRW 44억, down 67.9%.

• Standalone revenue grew across business lines; MD/licensing rose 71.6% YoY to KRW 398억, while appearances rose 27.4% to KRW 251억.

Outlook and guidance

• 2023 music lineup included releases from Key, Yesung, Onew, Kai, Taeyeon, aespa, SHINee and NCT units/soloists; schedule was as of Feb. 20 and subject to change.

• 2023 concert previews included NCT DREAM’s 30 shows, NCT 127’s 9, Super Junior’s 20, and aespa’s Japan tour with 10 dates; schedules were subject to change.

• Content lineup included TVING/Nippon TV/Hulu’s Welcome to NCT Universe and dramas planned for JTBC and OTT platforms.