Emart Reports Operating Profit of 150.7 Billion KRW Last Year... "Massive Investment of 850 Billion KRW Planned for This Year"

"One-time costs reflected such as specialty store inventory disposal"
Sales expected to surpass 21 trillion this year

[Asia Economy Reporter Seungjin Lee] Emart recorded an operating loss for the first time in history in the second quarter of last year, and continued to suffer poor performance with an operating loss again in the fourth quarter.

Emart announced on the 13th that its operating profit for 2019 was preliminarily estimated at 150.7 billion KRW, a 67.4% decrease compared to the previous year. Sales increased by 11.8% year-on-year to 19.0629 trillion KRW. Net profit decreased by 53.2% to 223.8 billion KRW.

Fourth quarter sales rose 14.4% to 4.8332 trillion KRW, and net income increased by 5.7% to 68.4 billion KRW. Operating loss turned to 10 billion KRW. Emart explained that this was due to one-time expenses of 50 billion KRW, including costs for disposing of specialty store inventory and promotional expenses for the 10 billion KRW "National Allowance" campaign.

After a poor performance last year, Emart plans to improve its results this year through investments in the 800 billion KRW range.

Emart stated in the announcement that it will continue large-scale investments of 845 billion KRW, of which about 30%, or 260 billion KRW, will be invested in strengthening fundamentals such as renewing and maintaining existing Emart stores and improving systems.

The company aims to strengthen its core competitiveness by enhancing grocery stores and expanding specialty stores with strong customer attraction such as Electromart, focusing on rebirth as an "Emart from the customer's perspective" to reinforce its main business competitiveness and secure profitability.

It also forecasted consolidated net sales of 21.02 trillion KRW this year, a 10.3% increase from the previous year. On a separate basis, it set a sales plan of 15.31 trillion KRW, a 4.3% increase from the previous year. Among these, discount stores plan sales of 11.263 trillion KRW, up 2.0% from last year, and Traders plan sales of 2.67 trillion KRW, up 14.2%.

SSG.com aims to achieve 3.6 trillion KRW in transaction volume (GMV) this year, targeting a 25% growth compared to the previous year.

SSG.com achieved 27.6% growth in the fourth quarter of last year, far exceeding the overall online market growth rate of 18.4%, raising expectations for achieving this year's goals.

Emart24, which set a target of opening 900 new stores this year, expects not only 29% external growth but also to surpass 5,000 stores in the second half of the year, when it anticipates achieving quarterly break-even point (BEP).

An Emart official said, "Despite unfavorable conditions such as sluggish business and changes in internal and external environments, Emart is expected to surpass 20 trillion KRW in sales for the first time in history this year," adding, "Emart will focus all efforts on external growth and profit concentration through changes centered on customers and markets, growth of existing stores, and improvement of profit and cash flow generation this year."

This content was produced with the assistance of AI translation services.