SEOUL, Aug. 11 (Yonhap) — South Korea’s premier manufacturer of instant noodles, Nongshim Co., reported on Friday that its net profit in the second quarter had skyrocketed more than 60 percent year-on-year thanks to heightened demand for its products and enlargement in overseas markets.
The company’s net income for the three-month period ending in June was 45 billion won (US$34.1 million), a surge of 60.9 percent from 28 billion won in the same period of the prior year, according to a regulatory filing.
Sales also rose 10.8 percent to 837.5 billion won, while operating profit ballooned more than elevenfold to 53.7 billion won, compared to the April-June period of the preceding year. The remarkable increase in operating profit was mainly attributed to the base effect of the domestic business’s operating loss in the second quarter of last year for the first time in 24 years, due to higher ingredient and management costs.
In the first half of the year, Nongshim’s net profit was 99.2 billion won, up 62.6 percent year-on-year, with sales increasing 13.8 percent to 1.7 trillion won and operating profit soaring 204.5 percent to 117.5 billion won.
Nongshim's flagship instant noodle products are piled up at a supermarket in Seoul on June 27, 2023. (Yonhap)
“Sales and operating profit improved as demand for ramyeon products, which are comparatively cheaper, increased amid an economic recession and high inflation,” a company official said.
Nongshim also said its overseas business was flourishing in the first half, noting it generated more than half of its operating profit from abroad. In particular, the U.S. market contributed 33.7 billion won in operating profit, accounting for 28 percent of the company’s total operating profit.
Sales in the U.S. rose 25.2 percent to 316.2 billion won and the operating profit climbed 536 percent to 33.7 billion won in the January-June period from a year earlier. This increase in operating profit was due to a price increase last year and a stabilization of international ocean freight charges since October.
Last month, Nongshim CEO Shin Dong-won announced the company’s goal to triple its sales in the U.S. by 2030 to lead the instant noodle market.
Nongshim aims to triple U.S. sales by 2030 to top instant noodle market