YG Entertainment reports first quarter operating loss of 7 billion won
YG Entertainment announced on the 10th that it recorded an operating loss of 7 billion won in the first quarter of this year. It turned into a deficit compared to the same period last year. During the same period, sales decreased by 44.5% to 87.3 billion won. Net profit for the period decreased by 98.7% to 400 million won.
YG Entertainment announced that its performance was affected by the decline in the main business of YG Plus, its main subsidiary, due to the slowdown in the global economy and increased market volatility, and losses in the valuation of investment products by YG Investment. The increase in investment expenses for new singers preparing for launch, including the recently officially debuted girl group Baby Monster, and new IP also had an impact.
A YG Entertainment official explained, “The initial investment in new talent is a short-term cost burden, but it is related to our future growth strategy.” He continued, “This first quarter performance includes new content development and marketing costs,” and added, “In the long term, we will strengthen the company’s competitiveness and pursue growth in various markets.”
Currently, YG Entertainment is carrying out a project to discover and foster new talent in earnest with the goal of debuting one or more new groups within the year. In addition , global auditions are being conducted in cooperation with local entertainment companies such as Japan's AVEX .
The market believes that the success of the promising talent Baby Monster, who debuted on the 1st of last month, will play a decisive role in YG Entertainment's return to profit. Baby Monster's mini album is performing well, selling more than 400,000 copies in just one week. Seongman Yoo, a researcher at Leading Investment & Securities, analyzed, “ With the full schedule of Blackpink, YG Entertainment’s flagship group, uncertain this year, the release of Baby Monster’s album and its success will play an important role in performance.”