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/Australia, while Korea's packaged food market rapidly shifted online with a 33% increase in online sales now exceeding 20% share.

• Bio business improved bulky amino acid performance due to global protectionism and anti-dumping tariffs in Europe, with lysine profit up in Europe and specialty amino acids focusing on arginine and histidine.

• Feed and care segment achieved a profit turnaround, with operating profit up KRW 50.5bn year-over-year and improved profitability in Vietnam and Indonesia.

Financial highlights

• Q1 2025 sales excluding logistics dropped 1.8% year-over-year to KRW 4.3625 trillion; OP fell 7.8% to KRW 246.3 billion; net profit declined 73% to KRW 26.9 billion due to higher corporate tax.

• Including logistics, Q1 sales were KRW 7.2085 trillion (down 0.1% year-over-year); OP decreased 11% to KRW 333.2 billion; net profit was KRW 57 billion, down 62.9%.

• Food sales grew 3% year-over-year to KRW 2.925 trillion, but OP 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; OP down 16% to KRW 82.5 billion.

• Feed and care sales fell 8% to KRW 542.5 billion, but OP rose by over KRW 50 billion year-over-year to KRW 35.2 billion.

• Logistics sales increased 2% to KRW 2.9926 trillion; OP dropped 22% to KRW 85.4 billion due to higher operational expenses from new initiatives.

Outlook and guidance

• Q2 2025 sales growth projected in the low to mid single digits, with an OP margin of 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 and care expects solid profit generation through full-scale feed sales, offsetting lower livestock prices in Indonesia.