Studio Dragon Records Strong Q1 Performance... "Rising Expectations for This Year"

[Asia Economy Reporter Yoo Hyun-seok] Studio Dragon recorded strong performance in the first quarter, brightening the outlook for its full-year results.

According to the Financial Supervisory Service's electronic disclosure on the 8th, Studio Dragon posted consolidated sales of 117.1 billion KRW and operating profit of 17.9 billion KRW in the first quarter. Sales decreased by 2.7% compared to the same period last year, but operating profit increased by 54.3%.

Shin Eun-jung, a researcher at DB Financial Investment, said, "The first quarter results reflected shows such as Cheolinwanghu, True Beauty, Some of Day and Night, as well as Luca and Vincenzo," adding, "Sales declined due to fewer scheduled episodes compared to the same period last year." She further explained, "The main reason for the favorable profit realization was the strengthened content competitiveness leading to higher selling prices for new works, and improved cost structure through accelerated amortization from 2019 to 2020, resulting in a decrease in cost of sales ratio to 79.8%."

Shin Soo-yeon, a researcher at Shin Young Securities, also said, "Operating profit significantly exceeded consensus," and added, "This was because, despite fewer TV scheduled episodes, the cost reduction in production and increased selling prices of new works in the first quarter improved the profitability structure."

The securities industry expects Studio Dragon to record strong performance this year. According to FnGuide, the securities industry's forecast for Studio Dragon's sales and operating profit this year are 569.1 billion KRW and 68.2 billion KRW, respectively, representing increases of 8.25% and 38.84% compared to the previous year. Researcher Shin Eun-jung evaluated, "If stable margins continue due to improved cost ratio, profit growth will become more prominent in the second half as the number of episodes increases with scheduling for OTT."

Lee Hyun-ji, a researcher at Eugene Investment & Securities, also emphasized, "As competition for Korean dramas intensifies, selling prices are rising in earnest, and production volume is expected to increase as works are prepared for digital platforms," adding, "By diversifying formations such as mid-form and short-form and controlling production costs, profitability is expected to improve significantly compared to last year."

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