HYBE Q3 profit down; foresees better 2025 after BTS’ military discharges

HYBE Co., the K-pop behemoth behind BTS, suffered a double-digit profit fall in the third quarter amid an ongoing feud with Min Hee-jin, the creative director of the girl group NewJeans and the absence of new albums released during the 2024 Paris Summer Olympics.

On Tuesday, HYBE reported a 25.4% drop to 54.2 billion won ($39 million) in operating profit in the July-September quarter, compared with the same period last year.

Its net profit plummeted 98.6% to 1.4 billion won in the same period, with revenue down 1.9% to 527.8 billion won, hit by falling album and download sales.

For many months HYBE founder and Chairman Bang Si-hyuk has been embroiled in a legal dispute with Min, the former CEO of ADOR, the label of NewJeans. HYBE claimed Min attempted a coup to take over ADOR with outside investors, but she has refuted such allegations.

After ousting her from the CEO position, ADOR’s board of directors extended her three-year term as a board member last month, effective from Nov. 2. But the board has refused to reinstate Min as CEO of ADOR.

In the third quarter, HYBE held fewer concerts than before and did not release new albums due to fears that the Paris Olympics from late July to early August would detract from its artists’ performances.

The Netflix documentary series Pop Star Academy: Katseye, which features the girl group’s apprentice period, and the concert film Seventeen Tour 'Follow' Again to Cinemas contributed to its revenue, offsetting declines in music album and download sales.

OUTLOOK

Looking ahead, the entertainment powerhouse expects a recovery in revenue and profits in the fourth quarter of this year and has a rosy outlook for 2025 as the seven members of the boy band BTS are set for military service discharge next year.

In June, Jin, the oldest member of the group, finished his mandatory national service and J-Hope wrapped up his service in October.

“The remaining BTS members are scheduled to be discharged from the military in June of next year and the day to see all its seven members in a group is getting closer,” said a HYBE official.

HYBE noted its operating margin continued to improve to 10.3% in the third quarter, versus 7.9% in the second quarter and 4.0% in the first quarter.

For all of 2024, its revenue is expected to reach 2 trillion won for the second straight year.

HYBE forecasts revenue growth in the current quarter as its star artists will be releasing new songs, including Jin's first solo track Happy scheduled for a Nov. 15 debut.

ENHYPEN, another seven-member boy band, will release a repackaged album titled Romance: Untold-daydream. Girl group Le Serrafim's new single will hit the Japanese market in December.

BoyNextDoor, a six-member boy band, will start its first concert tour next month.

Seventeen kicked off a world tour with its 13th mini album Spill the Feels, which sold 3.16 million copies in the first week of its release.

Shares in HYBE gained 2.64% to close at 202,500 won on Tuesday, versus a 0.47% dip in the Kospi index.

Write to Da Eun Choi at max@hankyung.com
 



Yeonhee Kim edited this article.