CJ Freshway Reports Q3 Operating Profit of 16.4 Billion KRW, Up 39% Year-on-Year

[Asia Economy Reporter Seungjin Lee] CJ Freshway, a food distribution and group catering specialist under CJ Group, has recovered its performance to pre-COVID-19 levels in the third quarter.

CJ Freshway announced on the 10th that its sales in the third quarter of this year were 562.9 billion KRW, down 14% from the same period last year, while operating profit grew 39% to 16.4 billion KRW. The operating profit for the third quarter alone was 17.4 billion KRW, and the cumulative operating profit from the first to third quarter was 26.1 billion KRW, approximately 3.5 times higher than the same period in 2019 before COVID-19.

CJ Freshway analyzed that the recovery in consumer sentiment due to the reduced impact of COVID-19, along with restructuring the business portfolio focused on high-growth areas such as kids and senior care expansion and manufacturing based on differentiated capabilities, were key factors.

By segment, food distribution saw a 17.8% decrease in primary product sales due to business structure reorganization, but increases in dining out and catering sales, along with price hikes and profitability improvements driven by economic recovery, resulted in a record-high operating profit margin of 3%. In the fourth quarter, the company plans to grow dining out and catering sales through recovery in consumer sentiment following the with-COVID-19 policy and expanded vaccination, as well as expanded operations of schools and welfare centers and strengthening of online platform capabilities.

The group catering segment also showed gradual recovery from the impact of COVID-19, recording sales of 117.2 billion KRW, slightly higher than the same period last year. This was attributed to continued orders mainly from hospitals and golf courses. In the fourth quarter, the company plans to continue growth in the corporate group catering market, which has been reopening since April, as well as in concession businesses such as golf courses and rest areas.

The manufacturing segment continued steady growth due to increased demand from the expanding home meal replacement (HMR) market. Songlim Food, a sauce-specialized subsidiary, recorded 21% growth compared to the same period last year, and J Farms, which supplies pre-processed agricultural products, maintained profitability in the third quarter following the first half. In the fourth quarter, the company plans to prepare for next year’s growth through efficient investments aimed at expanding sales.

CJ Freshway plans to strengthen marketing and IT capabilities to actively respond to trends and market changes. Additionally, based on the concept of open innovation, the company aims to concretize new businesses and enhance differentiation by advancing its core competencies in products and content.

Choi Seok-jung, Head of Management Support at CJ Freshway, said, “In the third quarter, economic activity improved due to expanded vaccination, increasing dining out demand and resulting in solid growth. In the fourth quarter, we will strengthen our role as a business partner supporting customer growth by selectively securing group catering orders focused on premium clients and reinforcing fundamental competitiveness.”

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