'Positive Factors Abound' CJ ENM Reports 9.5% Increase in Operating Profit Last Year... Targets 15% Growth This Year

Last Year's Sales Increased by 14.5% to 3.7897 Trillion
All Businesses Including Media, Commerce, Film, and Music Show Strong Performance
This Year's Operating Profit Target Set at 310 Billion

[Asia Economy Reporter Cha Min-young] CJ ENM recorded nearly 10% growth in operating profit as sales surged across all business divisions, including advertising, home shopping, and music, buoyed by the success of last year's film "Parasite." The company managed to achieve both external growth and internal stability. For its 2020 operating profit target, CJ ENM set a level about 15% higher than usual, aligning with CJ Group's focus on 'internal management.'

CJ ENM announced on the 13th that its consolidated operating profit for 2019 rose 9.5% year-on-year to 269.4 billion KRW. During the same period, sales increased 14.5% to 3.7897 trillion KRW, while net profit plunged 77.8% to 59.8 billion KRW. The net loss was due to a 44.7 billion KRW loss from discontinued operations following the sale of CJ Hello.

By business division, all sectors including media, commerce, film, and music posted sales growth and operating profits. The media division's annual sales rose 7.1% to 1.6784 trillion KRW, with operating profit reaching 70.9 billion KRW. Despite a sluggish overall broadcast advertising market, both TV advertising and digital advertising revenues increased by 8.5% and 22%, respectively, thanks to expanded mid-roll ad sales.

Commerce division sales increased 10.3% year-on-year to 1.4273 trillion KRW, with operating profit at 149.2 billion KRW. Strong sales of exclusive brand products such as 'A+G (Edge)', 'Jang Michelle Basquiat', and 'G Studio' contributed significantly. Both scale and profitability grew through restructuring low-profit businesses like some overseas subsidiaries and catalogs.

The film division's annual sales surged 63.8% to 349.3 billion KRW, with operating profit at 43.6 billion KRW during the same period. The box office success of "Parasite," which won four awards including the Palme d'Or at Cannes and the Academy Award for Best Picture, as well as self-produced hits like "Extreme Job" and "Bad Guys," had a major impact. The music division's sales rose 43.4% to 334.8 billion KRW, but operating profit was limited to 5.6 billion KRW due to profitability challenges from increased investment in new artists.

Meanwhile, CJ ENM's 2020 business plan includes △expanding global mega intellectual property (IP) across all divisions △strengthening competitiveness through securing exclusive brands and self-produced content △expanding digital distribution. The target annual sales and operating profit are 3.8 trillion KRW and 310 billion KRW, respectively. While sales are expected to maintain previous levels, operating profit is projected to increase by about 40 billion KRW, representing roughly a 15% rise from the previous year. This aligns with CJ Group's overall strategy to refrain from aggressive external expansion and focus on profitability enhancement this year.

By division, the media sector aims to increase the hit ratio of seasonal and content hits while strengthening mashups and digital original content to grow business through expanded integrated TV and digital advertising. The commerce division plans to expand exclusive brand businesses and enhance channel synergy centered on mobile to further improve profitability. The film division will continue to strengthen content competitiveness and accelerate global business, focusing on the U.S. market. The music division will expand global IP activities in the mid to long term with acts like 'Billie Lab' and 'TOO' to bolster future business capabilities.

A CJ ENM official said, “Despite a challenging market environment, CJ ENM focused on the intrinsic value of content to achieve steady performance growth and actively pursue global expansion. This year, we will further strengthen the content hit ratio and concentrate on profit growth through exclusive brand businesses and expansion of global and digital operations.”

This content was produced with the assistance of AI translation services.