Nongshim (004370) Q2 2025 earnings summary

Executive summary

• Consolidated sales rose 1.6% year-over-year to KRW 1,761bn in 1H 2025, with domestic sales up 0.4% and overseas sales up 4.7%.

• Operating income for H1 2025 was KRW 96.2bn, down from KRW 105.1bn year-over-year, and net income attributable to owners was KRW 88.6bn, down from KRW 96.1bn.

• The company maintained a strong market position in domestic ramen (56% share) and snacks (32.6% share).

• Noodle sales grew due to price increases and new products, while beverage sales declined sharply.

• Overseas growth was led by Japan and Vietnam, with partial sales from a new European subsidiary.

Financial highlights

• Gross profit for H1 2025 was KRW 497.3bn, with a gross margin of 28.3%.

• Operating profit fell to KRW 96bn from KRW 105bn, and net profit dropped to KRW 89bn from KRW 96bn.

• SG&A expenses increased slightly to KRW 401bn, with labor costs rising to KRW 101bn.

• Finance income rose significantly to KRW 312bn from KRW 22bn.

• Basic EPS for H1 2025 was KRW 15,328, down from KRW 16,617 in H1 2024.

Outlook and guidance

• The company is focusing on qualitative growth in domestic markets and aggressive overseas expansion, especially in the US, China, and Europe.

• Management notes a market slump offsetting Q2 price hikes, with demand slowing and cost pressures persisting.

• Smart farm business was added as a new growth area, leveraging IT and sustainable agriculture trends.

• Dividend policy targets a payout ratio of 25% or a minimum of KRW 5,000 per share.

• Forward-looking statements are subject to risks and uncertainties that may impact actual results.