Nongshim Reports Operating Profit of 38.6 Billion KRW in H1, Down 15.4% YoY

The first half sales reached 1.4925 trillion KRW, a 16.4% increase compared to the previous year

[Asia Economy Reporter Eunmo Koo] Nongshim announced on the 16th through a public disclosure that its consolidated sales for the first half of this year reached 1.4925 trillion KRW, a 16.4% increase compared to the same period last year. Operating profit for the same period was 38.6 billion KRW, down 15.4%, while net profit increased by 28.9% to 61 billion KRW.

By quarter, first-quarter sales grew 16.1% to 736.3 billion KRW, and operating profit also increased by 21.2%. However, in the second quarter, despite sales growing 16.7% year-on-year to 756.2 billion KRW, operating profit fell sharply by 75.4% to 4.3 billion KRW. Notably, operating profit on a separate basis (domestic performance excluding overseas subsidiaries) turned negative in the second quarter, leading to an overall deterioration in profitability. This marks the first operating loss for Nongshim in 24 years since the second quarter of 1998.

The sales increase in the first half was driven by growth in both domestic and overseas subsidiaries. Domestically, sales of key brands increased, while overseas subsidiaries in the US, China, and other markets expanded their local presence, achieving significant growth of 20.3%. Operating profit declined due to increased cost burdens from rising raw material and energy prices, as well as higher management expenses such as export costs. A Nongshim official explained, “The rise in international raw material prices and higher exchange rates increased the purchase cost of raw materials, and logistics costs related to oil and utility expenses also surged significantly, resulting in decreased operating profit despite increased sales.”