CJ Cheiljedang's Quarterly Earnings Hit by FX, Raw-Material and Oil Costs
CJ Cheiljedang (KRX:097950) swung to a loss in the second quarter as higher non-operating expenses weighed on earnings, despite revenue growth.Net loss attributable to shareholders of the parent company was 13.5 billion won, compared with a profit of 162.5 billion won the previous year, according to the company's disclosure filing on Tuesday.Sales rose 1.7% to 7.36 trillion won from 7.24 trillion won. Operating income fell 27% to 257.6 billion won from 353.1 billion won.The company attributed the decline in operating profit to margin pressure in Korea's food business from higher foreign-exchange and raw-material costs, global cost pressures from elevated oil prices, and a high base in the BIO business.Food sales increased, driven by continued channel expansion for key global strategic products, including Mandu and Hetbahn. Overseas food sales rose, with growth led by the Americas, Europe, and Asia-Pacific.For the third quarter, CJ Cheiljedang expects double-digit sales growth and an operating profit margin of about the mid-to-high 4% range, excluding CJ Logistics.The company expects continued overseas food growth, particularly through Mandu and Hetbahn in the Americas, mainstream expansion and new launches in Europe, and broader shelf-stable and frozen product offerings in Vietnam.However, logistics costs may continue to pressure margins amid elevated oil prices.
