YG Entertainment Sees Decrease In Operating Profit And Revenue For 1st Quarter of 2018

On May 14, Mirae Asset Daewoo Securities discussed what YG Entertainment’s performance during the first quarter of 2018 was like.

The brokerage revealed how YG Entertainment’s performance for this period fell short of market expectations, leading their target stock price to fall by 6.8 percent to 30,000 won (approximately $28.04).

Published on May 11, YG Entertainment’s operating profit for the first quarter of 2018 was revealed to be 2.3 billion won (approximately $2.1 million), an 84.4 percent decrease when comparing YOY (Year Over Year). Their sales revenue totals 77.3 billion won (approximately $72.2 million), also a 27.7 percent decrease YOY.

Researcher Park Jung Yeop explained, “While there were expectations for this quarter’s results as it reflects BIGBANG’s last tour before their enlistments, the initial performance of [YG’s] new variety show ventures was lacking.”

He continued, “In order for them to see profit as a content producer, it will take more time. While the [YG-produced] ‘MIXNINE’ and ‘Do the Right Thing’ aired during last year’s fourth quarter and this year’s first quarter, the agency lost close to 8 billion won (approximately $7.5 million) over the two quarters in production costs.”

Although Mirae Asset Daewoo Securities projected that YG Entertainment will inevitably see a decrease in revenue with the majority of sales from BIGBANG’s domestic and international activities essentially gone for the time being — due to four of them being enlisted and Seungri’s upcoming enlistment —, they looked favorably upon the next generation of artists under the agency.

Park Jung Yeop commented, “Overall, the growth from YG’s next generation of WINNER, iKON, and BLACKPINK is not bad. These three teams’ combined ticket sales for their Japanese concerts this year come out to be 37 percent of BIGBANG’s total audience last year of 1.44 million.”

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