Nongshim (004370) Q2 2024 earnings summary

Executive summary

• Consolidated sales rose 2.1% year-over-year to KRW 1,733bn in 1H 2024, driven by steady domestic demand and continued overseas expansion, especially in the U.S. and China.

• Operating profit decreased to KRW 105bn (down 10.6% year-over-year) due to increased raw material costs and higher selling and administrative expenses.

• Net profit attributable to controlling interests fell to KRW 96bn, a 3.3% decrease year-over-year.

• The company maintained its leading market share in domestic ramen (56.1%) and snacks (33.8%) despite a mature market environment.

Financial highlights

• Gross profit margin declined to 28.9% (down from 31.3%) due to input cost pressures.

• SG&A expenses reduced to KRW 395bn (22.8% of sales), while selling and administrative expenses rose to KRW 394.9bn, up 4.9% year-over-year.

• Advertising expenses dropped to KRW 61bn (3.5% of sales) from KRW 84bn (4.9%).

• Assets increased to KRW 3,388bn from KRW 3,165bn; equity rose to KRW 2,564bn from KRW 2,398bn.

• Dividend payout for the period was ₩5,000 per share, totaling ₩28.9 billion.

Outlook and guidance

• The company plans to focus on premium and health-oriented products, expand e-commerce channels, and strengthen overseas business, particularly in North America and Asia.

• Management expects ongoing cost pressures from raw materials and logistics but aims to offset these through operational efficiencies and product mix improvements.

• Continued investment in R&D and new product launches are expected to support growth amid a low-growth domestic market.

• Forward-looking statements highlight risks and uncertainties that may impact future results.