COVID-19 Benefits Shine... CJ CheilJedang Posts Strong 4Q Results

Food Business Thriving Domestically and Internationally... Bio Sector Also Growing

[Asia Economy Reporter Minwoo Lee] CJ CheilJedang, which saw a significant increase in processed food sales due to the rise of non-face-to-face (untact) lifestyles amid the spread of the novel coronavirus infection (COVID-19), is expected to achieve strong performance in the fourth quarter of this year as well. It is analyzed that the food business division is growing both domestically and internationally, while the bio business division has also strengthened its competitiveness by building up its capabilities.

According to financial information firm FnGuide on the 23rd, CJ CheilJedang’s consolidated performance forecast (consensus) for the fourth quarter of this year is sales of 6.3329 trillion KRW and operating profit of 324.7 billion KRW. This represents increases of 6.23% and 20.35%, respectively, compared to the same period last year. Following the third quarter’s sales of 6.3425 trillion KRW and operating profit of 402.1 billion KRW, which rose 8.2% and 47.5% year-on-year, steady performance is expected to continue.

A balanced rise across all business divisions is anticipated. For domestic processed foods, the early cold weather and the intensification of 'social distancing' measures are expected to have a positive impact. The cumulative sales for October to November are estimated to have grown by double digits compared to the same period last year. In particular, online sales during the same period are understood to have grown by more than 50%. Regarding home meal replacements (HMR), the additional operation of the frozen pizza production line is expected to contribute to sales growth.

Overseas processed foods are also growing rapidly. Sales for the fourth quarter are estimated at 338.1 billion KRW, an increase of 27.3% compared to the same period last year. The U.S. frozen food company 'Siuan’s,' acquired in 2018, is also expected to deliver results. Eunju Shim, a researcher at Hana Financial Investment, said, "Cumulative sales for October to November are understood to have grown 10% compared to the same period last year," adding, "Although the won-dollar exchange rate weakness is a key factor, the fact that steady growth continues is clearly positive." Accordingly, the operating profit for processed foods in the fourth quarter is expected to exceed 114.6 billion KRW, growing more than 140% year-on-year.

The bio business division, which focuses on amino acids and seasoning materials, is also expected to show steady growth. Sales are estimated at 755.9 billion KRW and operating profit at 77 billion KRW, representing increases of 6.1% and 12.2%, respectively, compared to the same period last year. It is evaluated that diversification of product lines and strengthening of cost competitiveness based on research and development (R&D) capabilities were effective.

The outlook for next year is also bright. According to FnGuide, the consolidated consensus for next year is sales of 25.6689 trillion KRW and operating profit of 1.4573 trillion KRW, expected to grow 5.18% and 4.30%, respectively, compared to this year.

A CJ CheilJedang official stated, "Since the second half of last year, we have proactively responded to crises through high-intensity structural improvements such as profitability enhancement and financial structure improvement, turning crises into opportunities and strengthening not only external growth but also internal stability," adding, "We will continue future growth by focusing capabilities on core products and businesses and securing structural competitiveness through strategic R&D investment."

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