Nongshim (004370) Q3 2024 earnings summary

Executive summary

• Consolidated sales for Q3 2024 declined 0.6% year-over-year to KRW 850bn, with domestic sales down 0.4% and overseas sales down 1.2%.

• Gross profit margin fell due to increased costs and expenses, with gross profit at KRW 237bn, down from KRW 262bn in Q3 2023.

• Operating profit dropped to KRW 38bn from KRW 56bn year-over-year, and net profit decreased to KRW 37bn from KRW 50bn.

• Achieved consolidated revenue of 2,583.6 billion KRW for the first nine months of 2024, down from 3,410.6 billion KRW year-over-year.

• Net income attributable to controlling interests was 132.6 billion KRW, compared to 149.4 billion KRW year-over-year.

Financial highlights

• SG&A expenses reduced to KRW 199bn (23.4% of sales) from KRW 207bn (24.1%), with notable cuts in advertising and service contract expenses.

• Gross margin for the period was 28.5%, slightly down from 29.1% year-over-year.

• Cash and cash equivalents at period-end were 191.8 billion KRW, up from 142.9 billion KRW at the end of 2023.

• Total assets increased to KRW 3,489bn, and equity rose to KRW 2,582bn.

• Dividend of 5,000 KRW per share paid, totaling 28.9 billion KRW.

Outlook and guidance

• Forward-looking statements note risks and uncertainties that may cause actual results to differ from projections.

• Focus on qualitative growth in domestic ramen and snack markets through premiumization and new product launches.

• Continued expansion in overseas markets, especially in the US, China, and Southeast Asia, with emphasis on the 'Shin' brand and premium products.

• Plans to enhance operational efficiency and supply chain resilience amid ongoing global uncertainties.