CJ Cheiljedang (097950) Q4 2024 earnings summary

Executive summary

• Q4 operating profit rose 39% year-over-year, driven by BIO profit growth and Feed & Care turnaround, despite a challenging environment.

• Overseas food sales reached record highs, with Europe up 37%, Japan up 13%, and Korea online food sales up 26% year-over-year, offsetting domestic weakness.

• Net profit was negative due to significant non-operating losses, mainly from asset impairments and FX losses.

Financial highlights

• Q4 sales (excluding logistics) grew 2% year-over-year to KRW 4.475 trillion; operating profit up 39% to KRW 219.9 billion; net profit negative KRW 261.9 billion.

• Q4 sales (including logistics) reached KRW 7.49 trillion (+2.8% YoY); operating profit KRW 377 billion (+26.5% YoY); net profit negative KRW 153 billion.

• Full-year 2024 sales (including logistics) up 1.2% to KRW 29.3591 trillion; operating profit up 20% to KRW 1.553 trillion; net profit KRW 362 billion (-35.3% YoY).

• SG&A-to-sales ratio increased by 90 bps to 22.8%; non-operating loss of KRW 430.5 billion, mainly from asset impairments and FX losses.

• Gross margin improved to 27.7% in Q4 2024 from 25.6% in Q4 2023 (excluding logistics).

Outlook and guidance

• 2025 sales growth expected in low single digits, with operating profit margin around 6%.

• Food expects H1 sluggishness but H2 recovery via core product expansion and online shift; overseas growth to continue, especially in GSP products.

• U.S. food growth to resume in H2 after resolving supply disruptions; China and Japan to focus on profitability and selective growth.

• BIO to benefit from strategic pricing, global competitiveness, and full recovery in major amino acid markets.

• New dividend policy: payout ratio set at 25%+ of net income (excluding non-recurring items) for 2024-2026; 2024 dividend per share KRW 6,001, up KRW 501 year-over-year.