CJ CheilJedang reported a double-digit revenue growth in the second quarter, fueled by increased overseas sales of global strategic products (GSP) such as dumplings and Hetbahn, along with a recovery in its bio business. However, domestic sluggishness and rising costs due to high oil prices led to a decline in operating profit.
On August 11, CJ CheilJedang announced that its operating profit, excluding CJ Logistics, was 161.9 billion won, with revenue reaching 4.195 trillion won. Compared to the same period last year, operating profit decreased by 18.4%, while revenue increased by 10.2%.
Including its subsidiary CJ Logistics, the consolidated operating profit was 257.6 billion won, and revenue totaled 7.3621 trillion won. Operating profit fell by 18.5% year-on-year, while revenue rose by 9.5%.
The food division expanded its footprint primarily in overseas markets, reporting an operating profit of 70.9 billion won and revenue of 2.8441 trillion won. Although operating profit decreased by 21.3%, revenue grew by 5.8%. The increase in overseas sales of GSP products like dumplings and Hetbahn was supported by the growth of health and wellness (H&W) based new products in the domestic market.
Overseas food sales reached 1.5072 trillion won, marking a 10.1% increase. In North America, sales grew by 10% due to expanded distribution channels for dumplings and Hetbahn. Europe saw a 19% increase driven by strong sales of dumplings, chicken, and noodles, while the Asia-Pacific region grew by 21% with frozen and shelf-stable products like dumplings, rolls, and seaweed. In China, sales increased by 5% due to higher sales of dumplings and frozen rice balls.
Domestic food sales rose by 1.4% to 1.3369 trillion won. The materials business faced cost pressures from high exchange rates and declining selling prices, but sales of H&W based new products partially offset these challenges.
Despite the growth in revenue, the profitability of the food business deteriorated. Continued sluggish domestic consumption and rising costs for packaging and raw materials due to high oil prices contributed to this decline. The drop in operating profit for the food business exceeded 20%, making cost management a key challenge for the second half of the year.
The bio division reported an operating profit of 91 billion won and revenue of 1.3509 trillion won. While operating profit decreased by 15.9% year-on-year, revenue increased by 20.8%. The growth was driven by increased sales of specialty amino acids like arginine and isoleucine, as well as lysine. Although intensified competition in the tryptophan market and a high profit base from the previous year led to a decline in operating profit compared to last year, it increased by 855 billion won compared to the previous quarter.
Additionally, the company recorded a net loss of 23.9 billion won in the second quarter due to foreign exchange transactions and derivative evaluation losses.
CJ CheilJedang plans to focus on improving profitability starting in the third quarter, based on recent business unit rebalancing. The lifestyle food division will expand overseas sales of GSP products like dumplings and Hetbahn while strengthening high-margin product lines domestically. The materials business will push for increased sales in new ventures, and the core materials business will focus on improving performance in response to external environmental changes in the second half of the year.
A CJ CheilJedang official stated, "We will accelerate the global expansion of K-food through our GSP products like dumplings and Hetbahn, while focusing on improving profitability through increased sales in the bio business and reducing manufacturing costs and fixed expenses."
* This article has been translated by AI.
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