CJ Cheiljedang (097950) Q2 2024 earnings summary

Executive summary

• Q2 2024 operating profit grew 14% year-over-year, driven by high-margin bio products, margin improvement in Feed and Care, and expansion in Food Americas, despite a 1% year-over-year sales decline in food.

• U.S. Mandu and pizza maintained top market share, with strong growth in Europe and Oceania offsetting declines in China and Japan.

• Korea's processed food sales rose 3% due to increased volume, despite weak domestic consumption.

• Net profit reached KRW 110.5 billion, supported by operating profit gains.

• BIO business sustained growth in high-margin products like Tryptophan (+38%), Specialty AAs (+15%), and Specialty T&N (+37%).

Financial highlights

• Q2 2024 sales (excluding logistics) were KRW 4.3314 trillion, with operating profit of KRW 269 billion.

• Including logistics, sales rose 0.3% year-over-year to KRW 7.2386 trillion, and operating profit increased 11.3% to KRW 383.6 billion.

• Net profit (excluding logistics) increased 59.5% year-over-year to KRW 110.5 billion.

• Gross margin improved to 29.8% (excluding logistics), up 2.0 percentage points year-over-year.

• EBITDA (excluding logistics) reached KRW 495.3 billion, up 5.7% year-over-year.

Segment performance

• Food: Sales down 1% year-over-year; processed food in Korea up 3%, but overall operating profit dropped 5% to KRW 135.9 billion; overseas growth in Americas (+8%), Europe (+57%), and Oceania (+51%).

• BIO: Sales up 1% year-over-year, operating profit up 17% to KRW 99 billion, with specialty products now 22% of sales.

• Feed and Care: Sales down 12% year-over-year to KRW 569.9 billion, but operating profit rebounded to KRW 34.1 billion due to livestock price recovery.

• Logistics: Sales up 3% year-over-year to KRW 3.0592 trillion, operating profit up 12% to KRW 125.4 billion, supported by e-commerce and operational efficiency.

• Korea processed food: Mandu +12%, Hetbahn +18%, DASIDA +9%.