Why Sony Music and Sony/ATV are on course for a big financial year

New MBW analysis of Sony Music Entertainment‘s fortunes suggests that – largely thanks to advantageous Yen exchange rates – it’s on course to post healthy rises in both revenues and operating profit for its full financial year, which completes at the end of this month.

Sony Music Entertainment (SME) is comprised of Sony’s recorded music business (Sony Music), its 50% stake in music publisher Sony/ATV and its ‘visual media and platform’ operation. (See below for individual analysis of Sony’s recorded music division and Sony/ATV.)

SME has now confirmed its previously-reported Q3 figures, with global sales for the three months to the end of 2014 up 13.1% to 163.6bn yen ($1.35bn; €1.18bn) and operating profit up 17% to to 25.4 billion yen ($210m; €183.1m).

But it’s also given an update on combined figures from its first three quarters – ie. the nine months to December 31 last year. And they suggest that SME – heavily helped by a weak Yen vs. the Euro and the US Dollar – will be posting a positive full-year deck in a few months’ time.

In the nine months to December 31 2014, SME recorded total revenues of 397.2bn Yen ($3.31bn; €3.06bn).

That’s up 6.9% on the 371.6bn Yen ($3.1bn; €2.86bn) it saw in the same period of 2013.

Meanwhile, it saw operating profits of 48.61bn Yen (€374m; $405m) in the nine-month period of 2014 – up 15.2% on the 42.2bn Yen ($352m; €325m) it posted for April-December 2013.

If it can now match the sales it posted last year in the three months to end of March (131.7bn Yen), it means Sony Music Entertainment should post full year revenues in excess of 520bn Yen ($4.3bn; €4bn). That would represent a comfortable increase on FY2013.

And unless it has an exceedingly poor quarter in Jan-Mar this year – a three-month period that contained its victorious showing at the BRITs – SME should also see its FY 2014 operating profit increase to somewhere north of 52bn Yen ($416m; $385m).

SME posted an operating profit of 8bn Yen in Jan-Mar last year. If it could repeat that, its FY2014 operating income would be even higher, topping 55bn Yen.




Publishing (Sony/ATV)

UPDATE: In the nine months to end of 2014, Sony Music Publishing‘s turnover was worth 49.3bn Yen in revenues ($411m; €376m).

That was up 9.3% on the 45.1bn ($376m; €347m) Yen it posted in Q1-Q3 2013.

If Sony can now match the publishing revenues it posted in January-March last year (21.7bn Yen), its full-year sales are on course to top 70bn Yen ($584m; €539m).

Currency conversion boost notwithstanding, It’s interesting to note the full-year fortunes of Sony/ATV’s biggest rivals in publishing in comparison: Universal Music Publishing Group recently posted €673m ($728m) in full-year revenues, while Warner/Chappell‘s last full-year sales topped $517m (€477.8m)

Recorded Music (‘Sony Music’)

In the nine months to the end of 2014, Sony’s recorded music operation (Sony Music) turned over 282bn Yen ($2.35bn; €2.17bn).

That’s 6% up on the 266.1bn Yen ($2.22bn; €2.05bn) it posted in Q1-Q3 2013.

If it can now match the Jan-March sales it posted last year (81.5bn Yen), Sony Music’s full-year revenues are on course to top 360bn Yen ($3bn; €2.76bn).

In the three months to the end of 2014, Sony Music recorded revenues of 122.2bn Yen ($1.02bn; €941m), up 13.8% on the 107.4bn Yen it posted the previous year.


How close MBW’s projections get to the real deal will be revealed in May, when Sony Corp is expecting to reveal the full-year fortunes of Sony Music Entertainment – including Sony/ATV.

As for Sony’s parent corporation, it’s forecasting a recently-reduced full-year net loss of $1.4bn.

This, however, is the last fiscal year before Sony enacts a new strategy to return the company to profitability – which includes prioritising Sony Music Entertainment and super-charging it with investment.Music Business Worldwide

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