Hite Jinro reported a 6.2% increase in operating profit for the third quarter of this year, despite a decline in both soju and beer sales due to a shrinking alcohol market. The company announced on November 13 that its consolidated operating profit reached 57.7 billion won, up from the same period last year, while sales fell by 5.5% to 632.4 billion won. The operating profit margin improved from 8.1% in the third quarter of last year to 9.1% this year. However, net profit decreased by 15.5% to 28.7 billion won compared to the previous year.
By business segment, both soju and beer sales declined, but operating profits increased. The operating profit for the soju segment rose by 7% to 45 billion won, despite a 3.5% drop in sales from 380.9 billion won to 367.5 billion won.
In the beer segment, operating profit increased by 8.4% from 10.8 billion won last year to 11.7 billion won this year. However, sales fell more sharply, decreasing by 9.7% from 226.3 billion won to 204.4 billion won.
Despite the decline in sales due to reduced alcohol consumption, cost-cutting measures led to improved profitability. According to the quarterly report, consolidated selling and administrative expenses for the third quarter were 223.5 billion won, down approximately 16.5 billion won from 240 billion won in the same period last year. Although gross profit decreased from 294.4 billion won to 281.2 billion won, the reduction in selling and administrative expenses exceeded this, resulting in increased operating profit.
Hite Jinro is working to maintain the competitiveness of its core brands while expanding its product lineup to meet changing consumer preferences. In the soju segment, the company lowered the alcohol content of its flagship Chamisul to 15.7% in June and introduced new products such as Jinro Light and All-New Jinro. In the beer segment, it continues to promote existing brands like Terra and Kelly while launching non-alcoholic beer Terra Zero and ready-to-drink (RTD) product Terra Sparkling.
However, cumulative performance for the first three quarters of this year has decreased compared to the same period last year. The consolidated cumulative operating profit stands at 178.6 billion won, a 1.6% decline year-on-year, while sales decreased by 4.5% to 1.84 trillion won. Cumulative net profit slightly increased to 105 billion won compared to the previous year.
A Hite Jinro official stated, "Despite the contraction in the alcohol market, we have driven performance improvement through a profitability-focused management strategy and ongoing cost efficiency efforts. We expect to strengthen our market dominance and further improve results through portfolio diversification with products like Terra Sparkling and Chamisul."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.