Shares of Universal Music Group NV plunged in Friday morning trading after the record label behind the Weeknd, Billie Eilish and Taylor Swift booked a lower profit for 2022.
At 0900 GMT, Universal Music shares UMG, -5.14% traded 4.4% lower at EUR21.31.
The world’s largest music company on Thursday posted an annual net profit of 782 million euros ($828.6 million), down 11.7% from 2021. Still, the company said it plans to pay shareholders a dividend of EUR0.51 per share, above the EUR0.40 per share it paid for the previous year. Universal aims to hand 50% of net profit to shareholders.
For the three months to the end of December, overall revenue climbed to EUR2.94 billion from EUR2.52 billion. Revenue from subscriptions grew 11.4% at constant currency to EUR1.04 billion, while ad-supported streaming revenue rose 1.8% to EUR400 million.
However, growth cooled down compared with the third quarter, when streaming revenue grew 5.2% at constant currency. Streaming services boomed at the height of the pandemic as listeners turned to digital when coronavirus restrictions brought live concerts to a standstill, though the pace of growth has declined in recent months.
Adjusted earnings before interest, taxes, depreciation, and amortization–a key profitability metric for Universal–increased to EUR620 million in the fourth quarter from EUR503 million, generating an adjusted margin of 21.1%.
Write to Mauro Orru at [email protected]; @MauroOrru94