Garak Market Fruit and Vegetable Wholesale Market Corporation's Net Profit Margin 5.5 Times Higher Than Industry Peers

[Asia Economy Reporter Jongil Park] Seoul Agro-Fisheries & Food Corporation (President Kim Kyung-ho) announced the financial analysis results of the fruit and vegetable wholesale market corporations (hereinafter ‘fruit and vegetable corporations’) at Garak-dong Agro-Fisheries Wholesale Market (hereinafter ‘Garak Market’) on the 8th, 2019.

The total sales of the five fruit and vegetable corporations?Seoul Cheonggwa, Jungang Cheonggwa, Donghwa Cheonggwa, Hanguk Cheonggwa, and Dae-a Cheonggwa?amounted to 147.8 billion KRW, showing an average decrease of 9% compared to the previous year.

However, the net income of the five fruit and vegetable corporations totaled 17.8 billion KRW, an increase of about 15% compared to the previous year.

This is due to the impact of fines imposed by the Fair Trade Commission in 2018. The average net profit margin of the five fruit and vegetable corporations in 2019 was 12%, which is 5.5 times higher than the same industry (wholesale and commodity brokerage business at 2.2%) and more than three times higher than the average net profit margin of 3.6% of 10 fruit and vegetable wholesale corporations in the Tokyo wholesale market in 2018.

The dividend payout ratio, which indicates the ratio of dividends paid to net income, was relatively high at 30?430% (average 61%) for the five fruit and vegetable corporations, showing 2.7 times the industry average (23%).

In particular, Jungang Cheonggwa and Dae-a Cheonggwa had dividend payout ratios of 128% and 430%, respectively.

The total amount of shipment incentives paid, which shows the efforts of the five fruit and vegetable corporations at Garak Market to collect produce from production areas, was 12.9 billion KRW, which is only about half of the limit set by the Seoul Metropolitan Government’s ordinance on the operation of agro-fisheries wholesale markets (within 15% of consignment commission income), which is 22.8 billion KRW.

The amount paid for shipment advance payments was 34.6 billion KRW, which is about 1% of the transaction amount, significantly lower than the 15% of direct traders at Garak Market and 8% of wholesalers at Gangseo Market. This suggests that the fruit and vegetable corporations at Garak Market need to make further efforts to improve services for shippers and to collect more volume.

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