SM Entertainment, one of South Korea’s leading entertainment companies, has sent shockwaves through the industry with its latest financial report for 2024. Despite a slight increase in overall revenue, the company recorded a staggering 99.4% drop in net profit, raising concerns about its financial stability.
According to the report, SM Entertainment’s net profit for 2024 plummeted to just 465 million KRW (approximately 319,000 USD), a significant decline from the previous year. The company’s operating profit also saw a 22.8% drop, reaching 87.5 billion KRW (60.1 million USD).
Surprisingly, SM’s total revenue increased by 3%, reaching 990 billion KRW (about 680 million USD). However, this growth was not enough to compensate for the sharp decline in profitability, raising questions about increased costs, failed investments, or internal financial mismanagement.
While SM Entertainment has remained a dominant force in K-pop with top acts like aespa, NCT, and EXO, the company has faced significant restructuring following HYBE's attempted takeover and Kakao's acquisition of a controlling stake in 2023. Increased production costs, artist management expenses, and possible underperformance of some projects could be factors contributing to this financial downturn.
This alarming decline in net profit has sparked concerns among investors and fans about the company’s long-term financial health. As SM prepares for new artist debuts and expansions, industry experts are watching closely to see if the entertainment giant can bounce back in 2025.
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