CJ CheilJedang said on the 11th that, on a consolidation basis, its preliminary operating profit for the third quarter this year came to 202.6 billion won, down 25.6% from a year earlier. The figure excludes results from its subsidiary CJ Logistics.
Including its subsidiary CJ Logistics, results on a consolidation basis showed revenue of 7.4395 trillion won, up 0.3% from a year earlier, while operating profit fell 15.9% to 346.5 billion won.
In the food business institutional sector, revenue inched up 0.4% to 2.984 trillion won from a year earlier, and operating profit rose 4.5% to 168.5 billion won. Despite continued growth in overseas markets, the domestic food business (revenue 1.5286 trillion won) struggled amid weak local demand and higher input costs.
The overseas food business posted revenue of 1.4554 trillion won. Riding the global craze for K-food, sales of global strategic products such as dumplings and processed rice (frozen and shelf-stable) increased 9% from a year earlier.
By region, revenue in Europe rose 13%, the strongest growth. As a result of an aggressive expansion across Europe since last year, the number of countries entered in Europe expanded to 27 as of the end of the third quarter. In Japan, where a new plant began operations in September, sales centered on Bibigo dumplings continued to grow (4%).
In the Americas, revenue increased 3% on the back of dumplings and pizza. In Oceania, revenue grew 5% as the company expanded products sold through key mainstream retail channels. After starting local production of dumplings in 2023 and kimchi last year in Australia, the company has been producing and selling K-chicken since the third quarter.
In the bio business institutional sector, revenue fell 8.4% to 979.4 billion won from a year earlier, and operating profit dropped 71.9% to 22 billion won. Intensifying market competition for high-margin products such as tryptophan, arginine and nucleic acids, along with weak lysine market conditions in Europe, reduced revenue and worsened profitability. Although the natural seasoning material TasteNrich increased sales volume by securing new customers, profitability deteriorated due to rising production costs.
The Feed & Care institutional sector recorded revenue of 569.2 billion won and operating profit of 12 billion won. Revenue and operating profit declined due to lower feed selling prices in key markets and a high base effect from a year earlier.
CJ CheilJedang projected that, despite expense reduction efforts in the fourth quarter, a decline in revenue and profit in the domestic food institutional sector will be unavoidable due to cost pressures. In the bio institutional sector, with competition intensifying against Chinese products and prices expected to fall, the effect of profitability improvement is likely to be delayed more than expected.
A CJ CheilJedang official said, "While accelerating our global expansion to help lead the K-wave, we will redouble efforts to improve profitability through streamlining our business portfolio."