South Korean food giant CJ CheilJedang Corp.'s quarterly operating profit increased for the third consecutive quarter, reversing a decline in the third quarter of 2023 thanks to sales growth in processed foods such as pre-cooked rice, frozen dumplings and frozen pizza.
According to its disclosure on Tuesday, the company recorded 269 billion won ($196.3 million) in operating profit and 4.33 trillion won in revenue in the second quarter, up 14.1% and down 2.1% on-year, respectively. The data on a consolidated basis includes earnings of all of its affiliates except for shipping unit CJ Logistics Corp.
When including CJ Logistics’ quarterly earnings, the food company logged 383.6 billion won in operating profit and 7.24 trillion won in revenue in the April-June period on a consolidated basis, up 0.3% and 11.3% on-year, respectively.
CJ CheilJedang’s food business posted a 135.9 billion won operating profit and 2.71 trillion won in revenue in the second quarter, down 4.8% and 1% from the year-earlier period, respectively. The company said its divestment of Chinese unit Jixiangju last year affected the declines.
Customer looking at CJ CheilJedang's gimbap at a Woolworths supermarket near Sydney, Australia (Courtesy of Yonhap)
The food sales include 1.38 trillion won in revenue from the domestic market and 1.32 trillion won from overseas.
Of the overseas sales, revenue from Europe increased 57%, driven by expanding distribution channels in Britain, Germany and the Netherlands.
In North America, sales of the company’s flagship products — frozen dumplings, pre-cooked rice and frozen pizza — rose 28%, 24% and 12% on-year, respectively. Bibigo and Schwan’s are the company's dumpling and pizza brands.
Quarterly food sales in the Oceania region jumped 51% on-year, led by new frozen gimbap and dumpling items launched in Australian supermarket chain Woolworths.
CJ CheilJedang’s bio business posted a 99 billion won operating profit and 1.06 trillion won in revenue in the second quarter, up 17.4% and 1% from a year ago, respectively. The increase was led by tryptophan, or alpha-amino acid, and natural food additives.
Its quarterly sales declined 12% on-year to 34.1 billion won due to falling animal feed and livestock sales in key markets, but its profitability has improved thanks to cost reduction and stabilization of meat prices.
Write to Hun-Hyoung Ha at hhh@hankyung.com Jihyun Kim edited this article.
