CJ CheilJedang Reports Decline in 3Q Sales and Operating Profit... "Food Operating Profit Turns to Growth" (Comprehensive)

Operating Profit 396 Billion KRW... Down 18.2% YoY
Food Business Division Sees Operating Profit Increase of 234.1 Billion KRW

CJ CheilJedang could not avoid poor performance in the third quarter of this year due to sluggishness in its bio business. However, led by Hetbahn and Bibigo, domestic processed food sales recovered, and the overseas food business continued to expand, turning the food business segment's operating profit into a growth trend.

CJ CheilJedang announced on the 13th through a disclosure that its separate sales in the third quarter of this year amounted to 4.6734 trillion KRW, down 9.1% compared to the same period last year, and operating profit decreased by 28.8% to 275.3 billion KRW.

Consolidated operating profit including CJ Logistics was tentatively estimated at 396 billion KRW, down 18.2% from the same period last year. Sales during the same period decreased by 7.1% to 7.4434 trillion KRW, while net profit increased by 2.2% to 230.8 billion KRW.

Looking at each business segment, the food business division recorded sales of 3.0059 trillion KRW and operating profit of 234.1 billion KRW. While operating profit decreased by 21% and 14.9% year-on-year in the first and second quarters respectively, it increased by 12% in the third quarter, turning to an upward trend. Domestic processed food sales increased by targeting the growing demand for home meals due to the slowdown in dining out consumption, led by core products such as Hetbahn and Bibigo, and efficiency in selling and administrative expenses through selection and concentration was effective.

The overseas food business also continued to expand, led by Global Strategic Products (GSP) such as dumplings, chicken, P-Rice, K-sauce, kimchi, seaweed, and rolls. In the key region of North America, dumplings solidified their top position by exceeding a 50% market share in grocery channels, and the representative pizza brand of Schwan’s, ‘Red Baron,’ which ranked first in market share for the first time last quarter, widened the gap with the second-ranked brand.

High growth was also recorded in new markets such as Europe and Oceania. Bibigo frozen rice and K-sauce were launched in Ocado, the mainstream channel in the UK, and seaweed snacks were introduced in ASDA. In Australia, Bibigo dumplings were sold in all stores of Woolworths, the largest local supermarket, accelerating the expansion of the K-food territory.

The bio business division, which focuses on feed additives, recorded sales of 898.7 billion KRW and operating profit of 10.2 billion KRW. Although sales and operating profit sharply declined due to the high base effect from the previous year, specialty amino acids such as tryptophan, valine, and arginine, which are high-margin products, maintained high sales growth in the 30% range.

The FNT (Food & Nutrition Tech) business division, which focuses on seasoning materials, nutrition, and future food materials, recorded sales of 159.5 billion KRW and operating profit of 36.9 billion KRW. Despite continued sluggish demand due to the global economic slowdown, sales of the premium seasoning material ‘TasteNrich’ improved compared to the previous quarter through new demand discovery.

CJ Feed & Care, an independent feed and livestock corporation, recorded sales of 609.2 billion KRW and a loss of 5.9 billion KRW. Profitability deteriorated due to price declines caused by sluggish feed and livestock demand in major business countries such as Indonesia and Vietnam.

CJ CheilJedang plans to strengthen its operations domestically with differentiated products while accelerating the strengthening of the No. 1 product position in the U.S. dumpling and pizza markets and mainstream entry into new regions such as Europe and Oceania. At the same time, the bio business division will continue to expand sales of high value-added specialty items to strengthen market dominance, and the FNT business division plans to actively target the global nutrition material market with antioxidant solutions such as ‘ActiveNrich.’

A CJ CheilJedang official said, “We will continue to strengthen sales of strategic products such as K-Street Food and expand new global territories while continuing efforts to improve profitability.”

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