CJ Cheiljedang (097950) Q3 2024 earnings summary

Executive summary

• Q3 2024 operating profit grew slightly, balancing declines in Korea Food with gains in overseas Food, Bio, and Feed & Care segments; online packaged food sales in Korea rose 17%, offsetting weak offline sales, while Americas and Europe drove overseas growth.

• Bio unit saw increased sales of high-margin products, including tryptophan (+21%) and arginine (+35%), and Feed & Care improved operating profit through structural enhancements and livestock productivity.

• The company maintained strong market positions in core food categories and continued global expansion, especially in K-Food and BIO segments.

• Strategic focus included premiumization, plant-based products, and sustainability initiatives.

Financial highlights

• Q3 2024 sales excluding logistics: KRW 4.62 trillion, down 1.1% YoY; operating profit: KRW 276.4 billion, up 0.4% YoY; net profit: KRW 141.6 billion, down 20.5% YoY.

• Including logistics: sales KRW 7.414 trillion (down 0.4% YoY), operating profit KRW 416.2 billion (up 5.1% YoY), net profit KRW 212.2 billion (down 8.1% YoY).

• Gross margin (excl. logistics): 28.5%; operating margin: 6.0%.

• YTD 2024 revenue: ₩21.87 trillion, up 0.6% YoY; operating profit: ₩1.18 trillion, up 18.4% YoY; net profit: ₩514.7 billion, up 26.3% YoY.

Outlook and guidance

• Q4 2024 profit growth expected, driven by expanded overseas sales, market recovery, and structural improvements; sales projected to grow low- to mid-single digits, with OPM around 5–6%.

• Food Korea to benefit from new product launches, online channel expansion, and recovery in cooking oil sales; overseas Food to maintain top market share and expand in Europe, Australia, and new categories.

• Bio segment expects continued growth in lysine and specialty products, with upside from a Chinese economic rebound; Feed & Care to improve with year-end demand and livestock price recovery.

• Continued focus on global K-Food expansion, premiumization, and plant-based product growth.