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S. Korean drama, film productions receive mixed Q2 results amid COVID-19 pandemic

All News 11:47 August 12, 2020

By Kim Boram

SEOUL, Aug. 12 (Yonhap) -- South Korea's major entertainment firms have posted mixed earnings reports for the second quarter, as the novel coronavirus pandemic has had a disproportionate impact on each sector.

Studio Dragon, a drama production company owned by entertainment giant CJ ENM, seems to be the biggest winner for the April-June period, during which people were asked to stay at home and enjoyed TV shows or binge-watched Netflix.

Its sales reached 161.4 billion won (US$136.1 million) for the April-June period, up 25.9 percent from a year earlier.

Its operating profit soared 56.3 percent on-year to 16.9 billion won, and its net profit surged 82.1 percent on-year to 13.4 billion won.

The company said the strong bottom line was led by brisk overseas sales of its hit dramas, like "Crash Landing On You," "The King: Eternal Monarch" and "It's Okay to Not Be Okay."

A scene from "Crash Landing On You" by tvN (PHOTO NOT FOR SALE) (Yonhap)

It earned 59.4 billion won from overseas sales over the three-month period, up 40.7 percent from a year ago.

On the other hand, its parent, CJ ENM, struggled with a sharp drop in sales from its filmmaking and distributing business, as the South Korean film industry experienced record-low audiences in spring.

According to a regulatory filing, CJ ENM logged 837.5 billion won in second-quarter sales, down 16.7 percent from a year earlier. Its operating profit also declined 16.1 percent on-year to 73.4 billion won.

In particular, sales of its film business plunged 81.5 percent on-year to 12.5 billion won, as nearly no film was released in the second quarter.

But CJ ENM said the COVID-19 pandemic helped its video-on-demand platform, tving, attract 66.2 percent more subscribers in the second quarter than the same period last year.

This file photo, taken on May 24, 2020, shows a relatively empty theater in Seoul. (Yonhap)

Meanwhile, CJ CGV, CJ Group's multiplex chain operating unit, has gone through the lowest of the low in the three months through June.

Its second-quarter sales plunged 91.4 percent on-year to 41.6 billion won, with an operating loss of 130.5 billion won, turning from an operating profit of 23.5 billion won.

J Contentree, which owns Megabox, one of the country's three largest multiplex chains, also swung to a net operating loss of 14.2 billion won. Its sales sank 41.8 percent on-year to 75.3 billion won.

Due to virus fears, the number of monthly moviegoers hit rock bottom in April with an all-time low of 970,000, and rose slightly to 1.53 million in May and 3.86 million in June.

CJ CGV and Megabox have adopted belt-tightening policies, including closures of theaters and layoffs, to deal with a financial crunch.

Experts said the South Korean entertainment sector, especially the film industry, will rebound in the third quarter, as the country has handled the spread of COVID-19 well, and summer blockbusters, like the zombie action film "Peninsula," have contributed to luring moviegoers to theaters.

"The worst crisis seems to be over, but there are still uncertainties," said analyst Choi Min-ha from Samsung Securities. "Their efforts to streamline business management will likely play a role in turning around in the coming months."

brk@yna.co.kr
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