Orion Reports Operating Profit of 157 Billion KRW in H1, Down 14.3%

Operating Profit Decline in China and Vietnam Markets

[Asia Economy Reporter Lim Hye-seon] Orion Group announced on the 11th that its business company Orion recorded consolidated sales of 1.1038 trillion KRW and operating profit of 157 billion KRW in the first half of 2021. Sales increased by 4.6% compared to the same period last year, but operating profit decreased by 14.3% due to profit declines in China and Vietnam.

Second quarter sales and operating profit were 501.7 billion KRW and 55 billion KRW, down 2.6% and 36.1%, respectively.

According to Orion, the Korean corporation recorded sales growth of 5% to 393.8 billion KRW and operating profit growth of 11.9% to 66.1 billion KRW. The snack category led overall sales growth with continued popularity of 'Kkobuk Chip' and positive responses to new products such as 'Kwasak Chip' and 'Gochu Chip'. The convenient meal replacement category including granola and the functional food brand Dr. You, which was reorganized, showed high growth of 70% and 54% respectively compared to the same period last year. The company explained that data-driven management in product production and inventory control within channels became ingrained, and continuous efforts in efficient cost management resulted in high operating profit growth rates.

The Chinese corporation’s sales slightly increased to 522 billion KRW compared to the same period last year. Compared to the first half of 2019, which was unaffected by COVID-19, sales grew by 15.6%. Operating profit was recorded at 59.7 billion KRW. The company explained, "Operating profit decreased due to the global rise in raw material prices and the absence this year of social security tax relief benefits that were granted last year due to the COVID-19 pandemic."

The Vietnamese corporation achieved sales growth of 13.7% to 145.6 billion KRW and operating profit decreased by 7.6% to 23.5 billion KRW. Leading the convenient meal market with the mass-produced bread 'Ssebbong', the rice snack category also continued its growth trend. The company is strengthening market dominance by launching competitive new products not only in existing main brands but also in the pie and biscuit categories. In terms of operating profit, increases in raw material prices such as oils and fats and temporary promotions to boost fresh potato market sales had some impact. In the second half, the company plans to expand sales channels for jelly products, which started local production, and develop them as new growth engines following rice snacks and mass-produced bread.

The overseas corporation showing the most remarkable growth was Russia. The Russian corporation recorded sales growth of 30.2% to 50.6 billion KRW and operating profit growth of 2.6% to 7.5 billion KRW. The main brand Choco Pie continues sales growth by successfully expanding its product lineup. Exports also increased to neighboring countries such as Mongolia and Kazakhstan, boosted by new Choco Pie products. Additionally, new biscuit products are steadily gaining popularity. The company plans to promote sales growth through various new product launches in the second half as well.

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