CJ CheilJedang Corp (XKRX:097950) Q2 2025 Earnings Call Highlights: Overseas Expansion Fuels ...

Release Date: August 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Overseas sales growth momentum continued, driven by regional expansion, particularly in the US, Japan, Europe, and Oceania. Net profit increased by 40% year over year to 149 billion won, driven by improved non-operating income, including lower interest expenses. The bio business saw improved profitability due to increased profits from lysine and SPC, despite market volatility. Online sales for packaged food in Korea increased by 24% year over year, partially mitigating the impact of weak domestic demand. The feed and care business improved profitability through expanded feed sales and enhanced cost management in livestock operations.

Negative Points

Overall sales decreased by 0.2% year over year to 4.3224 trillion won, impacted by a slowdown in the Korean food business. Operating profit declined by 7% year over year to 353.1 billion won, with a significant 34% drop in the food business unit. The Korean food business faced challenges due to weak domestic demand and rising raw material costs, leading to lower profits. The logistics segment experienced a decline in operating profit by 8% year over year due to decreased parcel volumes and initial stabilization costs for new contracts. Increased raw material costs and manufacturing disruptions negatively impacted profitability in the US food market.

Q & A Highlights

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Q: Can you elaborate on the factors contributing to the 40% year-over-year increase in net profit? A: The increase in net profit was primarily driven by improved non-operating income, including lower interest expenses. Despite challenges in the Korean food business, overseas sales growth and improved profitability in the bio and feed and care sectors contributed positively. - Chang Qihongg, Head of Corporate Finance

Q: How did the overseas food business perform, and what were the key growth drivers? A: The overseas food business maintained solid growth, with a 3% year-over-year increase in sales to 1.3688 trillion won. Key growth drivers included expanded sales of pizza in the US, entry into new mainstream channels in Europe and Oceania, and strong sales of Mandu in Japan. - Kuan Tae-ho, Head of Food Business Planning

Q: What challenges did the Korean food business face, and how did it impact overall performance? A: The Korean food business faced challenges due to weak domestic demand and rising raw material costs, leading to a 5% year-over-year decline in sales. This was partially mitigated by a 24% increase in online packaged food sales. - Tunhong-ho, Head of Food Korea Business Planning

Story continues

Q: Can you provide insights into the bio business unit's performance and future outlook? A: The bio business unit saw a 2% year-over-year increase in sales to 1.0798 trillion won, with operating profit up by 8%. This was driven by favorable market conditions for lysine and SPC. Looking ahead, we expect continued growth in lysine due to global protectionism and cost competitiveness. - Kim Jong-hyun, Head of Biobusiness Planning

Q: How did the feed and care business perform, and what are the expectations for the future? A: The feed and care business experienced a 3% year-over-year decline in sales due to price declines from stabilized raw material costs. However, profitability improved with a 25% increase in operating profit, driven by enhanced feed utilization and stable profit structures in Vietnam. - Ku Jonghyun, Head of Feed and Care Business Planning

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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