Food giant CJ CheilJedang's profits rise for 3rd straight quarter

South Korean food giant CJ CheilJedang Corp.'s quarterly operating profit increased for the third consecutive quarter, reversing a decline in the third quarter of last year, thanks to sales growth in processed food such as pre-cooked rice and frozen dumplings and pizza.

According to its disclosure on Tuesday, the company achieved 269 billion won ($196.3 million) in operating profit and 4.33 trillion won in revenue for the second quarter, up 14.1% and down 2.1% on-year, respectively. The data on a consolidated basis includes earnings of all affiliates of the food company but shipping unit CJ Logistics Corp.

Including CJ Logistics’ quarterly earnings, the food company logged 383.6 billion won in operating profit and 7.24 trillion won in revenue in the April-June period on a consolidated basis, up 0.3% and 11.3% on-year, respectively.

CJ CheilJedang’s food business posted a 135.9 billion won operating profit and 2.71 trillion won revenue in the second quarter, down 4.8% and 1% from a year-earlier period, respectively. The company said its divestment of Chinese unit Jixiangju last year affected the declines.

The food sales include a 1.38 trillion won revenue from the domestic market and 1.32 trillion won from overseas.

Of the sales abroad, revenue from Europe increased 57%, driven by expanding distribution channels in the UK, Germany and the Netherlands.

In North America, sales of the company’s flagship products frozen dumplings, pre-cooked rice and frozen pizza rose 28%, 24% and 12% on-year, respectively. Bibigo and Schwan’s are dumplings and pizza brands under the Korean company, respectively.

The quarterly food sales in Oceania jumped 51% on-year, led by new items of frozen kimbap and dumplings launched in Australian supermarket chain Woolworths.

CJ CheilJedang’s bio business posted a 99 billion won operating profit and 1.06 trillion won revenue for the second quarter, up 17.4% and 1% from a year ago, respectively. The increase was led by tryptophan, or alpha-amino acid, and natural food additives

Animal feed and livestock farming unit CJ Feed&Care, which CJ CheilJedang aims to sell for around 2 trillion won, swung to the black with a 34.1 billion won operating profit.

Its quarterly sales declined 12% on-year to 34.1 billion won due to falling animal feed and livestock sales in key markets, but the profitability has been improved thanks to cost reduction and stabilization of meat prices.

Write to Hun-Hyoung Ha at hhh@hankyung.com
Jihyun Kim edited this article.