Didim, With Corona Effect... "October Japanese Cuisine Sales Up 41% MoM"

[Asia Economy Reporter Yoo Hyun-seok] Didim, which operates dining franchises, announced on the 16th that sales of its Japanese cuisine franchise significantly increased last month, boosted by the With-Corona effect, and that its operating loss in the third quarter of this year was reduced by about half compared to the same period last year.

Didim's Japanese brand ‘Dokohana’ saw a 41% increase in sales last month compared to the previous month. Dokohana operates a total of five stores, including two in Gangnam, as well as locations in Bucheon and Songdo. ‘Baekjewon,’ famous for its charcoal-grilled galbi set meals, also recorded a 26.5% increase in sales in October compared to September.

A Didim company official stated, “The With-Corona policy and the year-end peak season are reflected in the sales. If various events proceed in the future, it is expected that performance exceeding the usual level will be possible.”

Didim plans to actively open overseas stores starting next month, as international travel restrictions are easing. Since the local Korean food brand MAGAL BBQ in the U.S. has generated operating profits, the company judges that overseas responses to K-food are positive and is considering expanding the brand across the United States. Additionally, starting next month, Didim plans to open stores in China, Japan, Pakistan, Thailand, Laos, and Cambodia.

The dining market, which had been stagnant due to COVID-19, is gradually recovering and gaining momentum. A Didim official said, “We have gone through difficult times for over two years. Recently, individual brand sales have shown signs of recovery, and the end of the long tunnel is in sight. In the case of the local Korean food brand MAGAL BBQ in the U.S., meaningful operating profits have been made, and interest in K-food among Americans is high,” adding, “We plan to review expanding stores across the U.S. while monitoring the COVID-19 situation.”

Until the third quarter of this year, Didim’s sales also declined due to social distancing measures. When COVID-19 spread, Didim implemented store operation and cost structure improvements from the second half of last year. As a result, store costs were reduced, leading to decreased losses. The operating loss in the third quarter this year was 2.6 billion KRW, about 51% less than the 5.4 billion KRW loss in the same period last year. The cumulative loss for the third quarter decreased by about 5.6 billion KRW compared to last year.

Short-term borrowings also decreased, with borrowings that reached 21 billion KRW last year dropping to 9.7 billion KRW this year, a reduction of more than half. Cash flow from operating activities turned positive at 2.3 billion KRW. Cumulative sales for the third quarter up to September this year were 47.8 billion KRW, with an operating loss of 5.2 billion KRW. Although sales decreased by more than 10 billion KRW compared to the same period last year, operating losses were reduced by more than 50%.

Didim had vulnerabilities in liquidity due to large losses in 2020, but it has continued efforts to improve its financial structure through issuing exchangeable bonds and convertible bonds. It is also planning a paid-in capital increase this month, which is expected to mark a new turning point.