Korean soju makers likely to log strong quarterly profit

HiteJinro Co., South Korea’s leading soju maker, will likely post its best-ever quarterly profit in the second quarter as the clear distilled spirit has caught on in overseas markets, not only with its fruit-flavor and zero-sugar products, but also for its traditional, vodka-like taste.  

HiteJinro's operating profit is estimated to have skyrocketed 340.3% to 52.4 billion won ($38 million) in the second quarter of this year from the year prior, according to a consensus forecast provided by FnGuide, a financial information company.

During the same period, its sales are estimated to have added 4.8% to 672.7 billion won.

For all of 2024, its operating profit is forecast to come in at 196.8 billion won, its highest since 2020.

“Soju product exports continue to take a bigger share (of HiteJinro’s sales) from 10% last year. It has diversified from fruit soju products such as grapefruit-flavor soju to traditional soju, so the profit growth is accelerating,” said Kim Tae-hyun, an analyst at IBK Investment & Securities.

HiteJinro grapefruit soju blends distilled liquor made from rice or other grains with the fruit to sweeten the colorless firewater. To appeal to young consumers, it has introduced new kinds of soju with a variety of fruit flavors and lower alcohol content than traditional soju. 

Marking its 100th anniversary this year, HiteJinro unveiled an ambitious goal to sell 500 billion won worth of soju in overseas markets annually by 2030. That is more than three times its sales target of 158.5 billion won for this year.

Lotte Chilsung Beverage will likely log strong quarterly results as well. Its sales are estimated to have soared 38.8% on-year to 1.1 trillion won in the second quarter, according to FnGuide.

Particularly, its alcoholic beverage division, accounting for about 30% of the company’s revenue, has notched over 100% growth in operating profit in the April-June quarter, analysts estimated.

The buoyant results offset about a 10% fall in its other beverage sales hit by a rise in ingredient prices.

Despite a slowdown in domestic demand, soju has been gaining popularity in overseas markets thanks to the rise of Korean culture, or the Korean Wave.

According to the Korea Customs Service, the country's soju exports in 2023 recovered to the $100 million level for the first time in 10 years. Its exports in the first half of this year increased by 4.7%, compared to the same period last year.

Japan is their biggest export market, making up 29.3% of soju exports, followed by the US with 24.1%, China with 12.8% and Vietnam with 5.5%. Until early 2010, Japan accounted for about 80% of South Korea’s soju exports.

Write to Hun-Hyoung Ha at hhh@hankyung.com
 


Yeonhee Kim edited this article.