Commerce Achieves Record High Performance Driven by Strong Food and Household Goods Sales
Content Business Continues to Struggle
[Asia Economy Reporter Minyoung Cha] KTH succeeded in defending its earnings in Q2, powered by strong performance in its commerce division, K Shopping. However, net profit sharply declined year-on-year due to corporate tax expenses and losses on film rights assets.
KTH announced on the 11th that its separate operating profit for Q2 (provisional) rose 3.3% year-on-year to 4 billion KRW. Revenue was 80.3 billion KRW, down 1.5% from the previous year, while net profit plunged 81.7% to 600 million KRW. The decrease in net profit was mainly due to increased corporate tax expenses and the valuation of film rights assets.
Commerce division sales increased 19.9% year-on-year to 51.8 billion KRW, and operating profit rose 120.5% to 5 billion KRW. This growth was driven by expanded performance in tangible products, centered on food and daily necessities categories. The commerce division has maintained profitability since turning a profit in Q2 last year and recorded its highest operating profit this quarter.
Information and Communication Technology (ICT) division sales decreased 2.0% year-on-year to 19.5 billion KRW. The ICT division is expanding its participation in the group’s future strategic businesses, focusing on energy management and local currency development projects. It plans to continue growth by expanding new projects related to 5G in the future.
Content division sales fell 51.5% year-on-year to 8.9 billion KRW. The decline was due to a reduction in new content caused by the cultural content market downturn amid the COVID-19 pandemic. The content division plans to improve profitability by entering new businesses to enhance the efficiency of its existing rights.
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