CJ CheilJedang's stock has dropped significantly following a report that its operating profit fell sharply despite revenue growth in the second quarter.
As of 9:45 a.m. on the Korea Exchange, shares of CJ CheilJedang were trading at 190,800 won, down 14,700 won (7.15%) from the previous trading day.
The company announced its second-quarter results today. Excluding CJ Logistics, revenue reached 4.195 trillion won, a 10.2% increase compared to the same period last year. However, operating profit fell to 161.9 billion won, an 18.4% decrease. While revenue saw double-digit growth, profitability has worsened.
Notably, the profitability of the core food business has declined significantly. The food division reported sales of 2.844 trillion won, up 5.8%, but operating profit dropped to 70.9 billion won, a 21.3% decrease. This marks a stark contrast to the first quarter, where food business operating profit was 143 billion won, an 11.2% increase year-on-year.
The overseas food business continued to grow, with sales reaching 1.507 trillion won, a 10.1% increase, driven by higher sales of key products such as dumplings, Hetbahn, chicken, and noodles in North America, Europe, and the Asia-Pacific region. However, rising raw material prices, high oil costs, and currency fluctuations have pressured profitability.
Market sentiment is currently focused on the declining profitability and cost pressures in the domestic food business rather than the growth of the overseas segment. CJ CheilJedang plans to improve profitability in the second half of the year by expanding sales of global strategic products, increasing bio business sales, and reducing manufacturing costs and fixed expenses.
As of 9:45 a.m. on the Korea Exchange, shares of CJ CheilJedang were trading at 190,800 won, down 14,700 won (7.15%) from the previous trading day.
The company announced its second-quarter results today. Excluding CJ Logistics, revenue reached 4.195 trillion won, a 10.2% increase compared to the same period last year. However, operating profit fell to 161.9 billion won, an 18.4% decrease. While revenue saw double-digit growth, profitability has worsened.
Notably, the profitability of the core food business has declined significantly. The food division reported sales of 2.844 trillion won, up 5.8%, but operating profit dropped to 70.9 billion won, a 21.3% decrease. This marks a stark contrast to the first quarter, where food business operating profit was 143 billion won, an 11.2% increase year-on-year.
The overseas food business continued to grow, with sales reaching 1.507 trillion won, a 10.1% increase, driven by higher sales of key products such as dumplings, Hetbahn, chicken, and noodles in North America, Europe, and the Asia-Pacific region. However, rising raw material prices, high oil costs, and currency fluctuations have pressured profitability.
Market sentiment is currently focused on the declining profitability and cost pressures in the domestic food business rather than the growth of the overseas segment. CJ CheilJedang plans to improve profitability in the second half of the year by expanding sales of global strategic products, increasing bio business sales, and reducing manufacturing costs and fixed expenses.
* This article has been translated by AI.
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