CJ Cheiljedang (097950) Q1 2025 earnings summary

Executive summary

• Overseas food sales grew 8% year-over-year, led by a turnaround in China, growth in Japan, and expansion in Europe and Australia, while Korea's packaged food market rapidly shifted online with digital sales up 33% and now over 20% of total.

• Bio business improved bulky amino acid performance due to global protectionism, anti-dumping tariffs in Europe, and competitor exits in the Americas.

• Feed & Care segment achieved a profit turnaround, with operating profit up KRW 50.5bn YoY and 52% QoQ, driven by strong hog prices in Vietnam and business restructuring.

Financial highlights

• Q1 2025 sales excluding logistics dropped 1.8% year-over-year to KRW 4.363 trillion; operating profit fell 7.8% to KRW 246.3 billion; net profit declined 73% to KRW 26.9 billion, impacted by higher corporate tax.

• Including logistics, Q1 sales were KRW 7.2085 trillion (flat YoY); operating profit decreased 11.4% to KRW 333.2 billion; net profit was KRW 17.6 billion.

• Food sales grew 3% YoY to KRW 2,925 billion, but operating profit dropped 30% to KRW 128.6 billion due to high raw material costs and lower gift set sales in Korea.

• Bio sales declined 12% to KRW 895.4 billion; operating profit down 16% to KRW 82.6 billion.

• Feed & Care sales fell 8% to KRW 542.5 billion, but operating profit rose by over KRW 50 billion YoY to KRW 35.2 billion.

• Logistics sales increased 2% to KRW 2,993 billion; operating profit dropped 22% to KRW 85.4 billion.

Outlook and guidance

• Q2 2025 sales growth projected in the low to mid single digits, with an operating profit margin of about 6%.

• Food Global expects normalization of U.S. dessert production, sustained growth in Japan/China, and continued expansion in Europe/Australia.

• Food Korea anticipates growth via online transition and new products despite raw material cost pressures.

• Bio expects profit improvement as favorable market conditions for bulky amino acids take effect.

• Feed & Care expects solid profit generation despite macroeconomic headwinds in Indonesia.