CJ Cheiljedang’s Q2 Profit Declines Drastically Due to Economic Downturn and Expenses


South Korean food corporation CJ Cheiljedang Corp. reported on Monday that their second-quarter net profit had plummeted almost 50 percent from the same period last year due to a worldwide economic recession and a higher cost burden.

The company stated in a regulatory filing that their net profit for the three months ending in June was 127.5 billion won (US$97.6 million), a 49.6 percent decrease from the previous year. Additionally, the operating income for the April-June period dropped 31.7 percent year-on-year to 344.6 billion won, and revenue decreased 4 percent to 7.22 trillion won.

CJ Cheiljedang’s main food business saw their sales grow 5 percent to 2.73 trillion won in the second quarter from a year ago, but their operating profit decreased 15 percent to 142.7 billion won. Domestic sales rose 2 percent from the prior year to 1.42 trillion won, and overseas sales increased 8 percent to 1.31 trillion won.

The company’s global strategic products, such as frozen dumplings, fried chicken, processed rice, Korean-style sauce and kimchi, drove the increase in sales, a company official said. Sales in the U.S. rose 13 percent due to the popularity of their frozen dumpling and pizza products. However, sales in the Asia-Pacific and European regions declined 9 percent, mainly because of economic slowdowns in China and Japan.

The bio business saw a 20 percent drop in sales and a 76 percent decrease in operating profit in the second quarter from a year ago, and the food and nutrition technology business had a 26 percent sales decrease and a 17 percent operating profit reduction. Sales of CJ Cheiljedang’s feed and care business also fell 3 percent year-on-year, while its operating profit jumped 159 percent.

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