Nongshim Q3 Operating Profit Down 6.2% YoY... Domestic Market Turns Profitable (Comprehensive)

[Asia Economy Reporter Song Seung-yoon] Nongshim showed balanced growth in both domestic and overseas markets, resulting in increased sales in the third quarter, but operating profit declined due to rising raw material prices and a sharp increase in exchange rates.

Nongshim announced on the 14th through a public disclosure that its consolidated operating profit for the third quarter of this year was 27.3 billion KRW, a 6.2% decrease compared to the same period last year.

Sales increased by 20.8% to 813 billion KRW, and net profit rose by 11.7% to 28.3 billion KRW. Nongshim had posted an operating loss of 3 billion KRW in the second quarter based on separate financial statements, turning to a deficit, but recorded an operating profit of 13.2 billion KRW in the third quarter, returning to profitability.

By business segment, ramen, snacks, and beverages all showed steady growth, and overseas sales expanded mainly through the North American subsidiary. However, the gross profit margin decreased due to the burden of raw material costs and the impact of rising exchange rates.

Domestically, the Welch’s brand in the beverage sector led sales, and the snack segment also saw increased sales due to higher sales of Sobaek and corn snacks. In ramen, sales grew due to increased sales of bagged and cup noodles, along with growth in core brands and the effect of new products. Overseas, sales declined in the Chinese market due to weakened consumer sentiment, but sales expanded in the main channels in the U.S. and Canada, and sales performed well in Japan centered on the Shin Ramyun brand.

A Nongshim official said, "Sales increased due to improved domestic market conditions, expanded sales of core brands, and continued growth of overseas subsidiaries such as in the U.S., but operating profit decreased as the burden of rising raw material prices persisted. The return to profitability in the domestic market was influenced by increased outdoor activities following the easing of social distancing measures due to COVID-19, which boosted sales of cup noodles and snacks."

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