CJ CheilJedang posts sales drop amid slowdown in domestic consumption

CJ CheilJedangs headquarters in central Seoul Courtesy of CJ Newsroom — CJ CheilJedang's headquarters is seen in central Seoul, in this undated photo. Courtesy of CJ CheilJedang

SEOUL, August 12 (AJP) - Food manufacturer CJ CheilJedang posted an operating profit of 353.1 billion won or approximately US$253.8 million in the second quarter, down about 7 percent as domestic consumption remains sluggish, despite robust sales in overseas markets.

According to financial reports released on Tuesday, the country's largest food giant's consolidated revenue including sales from its logistics unit stood at 7.24 trillion won in the period between April and June, a slight decline of 1.5 billion won from a year ago.

CJ's core food business division posted revenue of 2.69 trillion won, down just 1 percent, while operating profit fell 34 percent to 90.1 billion won.

It attributed the setbacks to sluggish domestic consumption, with food sales dropping 5 percent to 1.32 trillion won as consumers kept their wallets shut at offline retail stores.

However, online sales of processed food surged 24 percent, offering some relief from the decline at traditional brick-and-mortar stores.

Overseas sales also rose 3 percent to 1.37 trillion won, driven by its flagship brand Bibigo gaining traction from major foreign markets. In particular, sales in North America reached 1.11 trillion won, with frozen rice up 19 percent, chicken rising 12 percent, and rolls increasing 18 percent.

The biotechnology-based food business division also posted steady growth, with revenue rising 2 percent to 1.08 trillion won and operating profit climbing 8 percent to 102.4 billion won.

CJ plans to accelerate its culinary expansion in the second half by building or enhancing production facilities overseas including Japan, while developing more diverse products to meet demand from health-conscious consumers here.

Kim Dong-young davekim0807@ajupress.com