The COVID-19 pandemic has severely impacted the music industry in its entirety, with Warner Music Group(WMG) continuing to see operating losses into Q3 this year. According to a recent fiscal report, the company posted a net loss of $519 million, compared to an adjusted net income of $18 million for the same quarter. This trend follows reported losses for Q2, which were announced back in May.
This loss contrasts with the company’s $58 million operating income in the 2019’s Q3. The company’s $18 million adjusted net income was significantly less compared to 2019’s Q3 $38 million adjusted net income.
A total of $86 million of these losses were caused by one-time costs associated with the Company’s IPO, which launched back in May. The rest of the recorded drops were caused by operating losses of $433 million compared to operating income.
While the company has been posting losses due to the pandemic, the company did better than expected as the event continues to affect the music industry. While revenue overall was down by 4.5 percent, digital revenue for the company grew by 11.1 percent.
“These results are slightly better than our expectations, given the sustained effect that COVID has had on certain aspects of our business,” added Eric Levin, Executive Vice President and CFO, Warner Music Group. “That’s a testament to the incredible ability of our teams, our artists and our songwriters to pivot and adapt, and to keep the hits coming. We have a robust cash position and all the music and resources needed to come out the other side of this with our long-term prospects as strong as ever.”
Warner Music Group opened up with 77 million shares at $25 per share, capping out at a valuation of $15 billion. Shares went up by 20 percent after the first day of training, however its market cap today is slightly lower according to Yahoo Finance, which recorded its market cap at $14.662 billion.