First Half of 2023 Financial Highlights
- Total revenue was
RMB62.1million (US$8.6 million ), compared toRMB80.5 million in the same period of 2022.
- Total gross profit was
RMB42.0 million (US$5.8 million ), compared toRMB29.1 million in the same period of 2022.
- Net profit was
RMB9.0 million (US$1.2 million ), compared to net loss ofRMB31.6 million in the same period of 2022.
- Non-IFRS net profit [1] was
RMB21.1 million (US$2.9 million ), compared to a Non-IFRS net loss ofRMB0.2 million in the same period of 2022.
First Half of 2023 Operational Highlight
- During the first two quarters of 2023, the Company added an additional nearly 73,000 tracks of classical music to its content offering. The Company’s copyrighted classical music content now includes over 3.06 million music tracks as of
June 30, 2023 . This is comprised of more than 2.17 million tracks of classical music, more than 890 thousand tracks of jazz, world, folk and other genres of music, as well as over 2,900 video titles, more than 4200 spoken content albums and more than 5,750 volumes of sheet music. These contents span across more than 410 thousand musicians, more than 2 thousand musical instruments and more than 200 countries and regions.
- In addition, the company has added more long-form videos including opera, live concert, ballet, documentary, master class, international competition, live streaming to further enrich its classical music library and capture the growth opportunities in the market.
- Regarding the subscription business segment, our aggregated institutional subscribers increased to 863 as of the end of the second quarter of 2023 from 846 as of the end of 2022 across China.
Looking ahead, despite the challenges presented by the broader macroeconomic environment, we remain committed to enhancing our portfolio of music rights-related products and services. Simultaneously, we are implementing further cost-saving measures to achieve an even more efficient cost structure. These steps are crucial for our continuous growth and maintaining resilience in an ever-changing market environment.”
First Half of 2023 Financial Results
Total Revenue
Total revenue decreased by 22.8% to
- Total licensing and subscription segment revenue increased by 7.5% to
RMB41.3million (US$5.7 million ) fromRMB38.4 million in the same period of 2022. Specifically, licensing revenue increased by 11.2% toRMB33.5 million (US$4.6 million ) fromRMB30.1 million in the same period of 2022, due to renew a large contract. Subscription revenue decreased toRMB7.8 million (US$1.1 million ) fromRMB8.3 million in the same period of 2022, mainly due to the decrease in sales of hardware products.
- Total smart music learning solutions segment revenue increased by 10.1% to
RMB17.5 million (US$2.4 million ) fromRMB15.9 million in the same period of 2022. Specifically, smart music learning solutions sales revenue from public schools and commercial clients increased by 228.0% toRMB17.2 million (US$2.4 million ) fromRMB5.3 million in the same period of 2022, mainly due to the increased sales to commercial clients. Smart music learning solutions subscription revenue from kindergarten students decreased by 97.5% toRMB0.3 million (US$0.0 million ) fromRMB10.6 million in the same period of 2022, due to the strategic contraction of our private kindergarten business starting from 2022.
- Total live music events segment revenue decreased to
RMB3.3 million (US$0.5 million ) fromRMB25.7 million in the same period of 2022, due to the strategic contraction.
Gross Profit and Gross Margin
Gross profit in the first half of 2023 increased to
- The gross margin of classical music licensing and subscription segment was 70.7%, compared to 71.0% in the same period of 2022. Specifically, the gross margin of classical music licensing increased to 87.1% from 79.4% in the same period of 2022. The gross margin of classical music subscription decreased to 0.4% from 40.7% in the same period of 2022, due to the higher linear amortization costs of royalty payments.
- The gross margin of smart music learning solutions segment was 73.1%, compared to (4.1) % in the same period of 2022. Specifically, the gross margin of smart music learning solution sales increased to 79.0% from 41.4% in the same period of 2022, due to higher-margin business representing a larger percentage of our revenue mix compared to the previous year. The gross margin of smart music learning solution subscriptions from private kindergarten students was (310.3) %, compared to (26.6) % in the same period of 2022 due to business strategy contraction revenues are falling faster than costs are falling.
Operating Expenses
Total operating expenses in the first half of 2023 decreased by 50.9% to
- Selling and distribution expenses in the first half of 2023 decreased by 2.9% to
RMB13.9 million (US$2.0 million ) fromRMB14.0 million in the same period of 2022. The increase was mainly due to compressed related operating expenses.
- Administrative expenses in the first half of 2023 decreased by 60.2% to
RMB17.5 million (US$6.1 million ) fromRMB44.0 million in the same period of 2022, due to reduced management costs.
- Impairment losses on financial assets in the second quarter of 2023 decreased by 79.6% to
RMB1.8 million (US$0.2 million ) fromRMB8.8 million in the same period of 2022. This was mainly due to the collection of accounts receivable having improved.
Operating Profit
Operating profit in the first half of 2023 was
Net Profit for the Period
Net profit was
Non-IFRS Net Profit for the Period
Non-IFRS net profit was
Net Profit per ADS and Non-IFRS Net Profit per ADS
Basic and diluted net profit per American Depositary Share (“ADS”) were both
Balance Sheet
As of
Recent Developments
Appointment of New CFO
Mr.
Closing of KOLO Purchase
On
About
Kuke is a leading classical music service platform in
For more information about Kuke, please visit https://ir.kuke.com/ The Company routinely provides important updates on its website.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into
Forward-looking Statements
This announcement contains forward looking statements. These statements are made under the “safe harbor” provisions of the
Use of Non-IFRS Financial Measures
The Company uses non-IFRS profit for the period, which is a non-IFRS financial measure, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that non-IFRS profit helps management to analyze trends in the Company’s business that could otherwise be distorted by the effect of certain expenses that the Company includes in its profit or loss for the period.
Non-IFRS profit for the period should not be considered in isolation or construed as an alternative to net profit for the period or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review non-IFRS profit for the period and the corresponding footnote explaining the calculation of such measure together. Non-IFRS profit for the period presented here may be different to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently and should not be compared to the measure adopted by the Company’s data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.
Non-IFRS profit for the period represents profit or loss for the year excluding the combined effect of amortization and depreciation, share-based compensation, impairment losses on financial assets, net, and the corresponding income tax effects of these non-IFRS adjustments.
Investor and Media Contact:
Email: ir@kuke.com
[1] | Non-IFRS profit/loss of the Company was calculated after excluding the combined effect of amortization and depreciation, share-based compensation, impairment losses on financial assets, net, and the corresponding income tax effects of these non-IFRS adjustments. |
Source:
2023 GlobeNewswire, Inc., source