JTC Significantly Reduces Operating Loss Last Year... "Confident in Turnaround This Year"

JTC, which operates duty-free shops in Japan, announced that its consolidated financial statement sales reached 35.79373 billion KRW (3.688 billion JPY), marking a 156.3% increase compared to the same period last year. During the same period, operating loss and net loss were 15.16324 billion KRW (1.562 billion JPY) and 14.69806 billion KRW (1.514 billion JPY), respectively, improving by 83.2% and 83.9% from the previous year. JTC’s fiscal year ends in February.

JTC stated, “With visa-free entry allowed in Japan since last October, foreign tourists, mainly from Korea and Southeast Asia, have increased, significantly reducing the operating loss compared to the previous year. Both sales and profits are recovering rapidly, and we expect a definite performance turnaround and removal from the management watch list this year.”

Last year, annual sales from Korean tourists recovered to about 60% of the 2019 level. Notably, January of this year, which successfully turned a monthly profit, recorded sales at 73% of the same month in 2019, and February reached 94%. In the Southeast Asian region, aggressive marketing was conducted targeting new travel agencies, with February 2023 sales in Taiwan and Thailand reaching 169% and 61%, respectively, compared to the same month in 2019.

The travel industry infrastructure is also rapidly normalizing. Japanese airlines JAL and ANA have increased flights and resumed operations on Japan-China routes since last month. Additionally, cruise tourism products scheduled to depart in June and July this year will be officially sold starting mid-month. As the normalization of the travel industry leads to a rapid recovery in demand for group tours to Japan, JTC is making thorough preparations, including large-scale hiring of sales personnel and inspection and repair work at all stores.

JTC, which was hit hard by the COVID-19 pandemic, secured the capital and strategic allies necessary for business normalization by conducting a third-party allotment capital increase worth 50 billion KRW to the global private equity firm Apalma Capital in December last year. Subsequently, Fumiya Yamamoto, former Vice President of Mastercard Japan and Chief Financial Officer of the Personal Finance Division at Citibank Japan, was appointed as Vice President and CFO to reorganize the organization and advance management sophistication. JTC also plans to conduct management efficiency consulting in the future. Under the joint management of CEO Koo Cheol-mo, who has led Japan’s number one duty-free shop business for 29 years, and Apalma Capital, which has extensive experience in corporate restructuring and enhancing shareholder value, JTC is confident in its mid- to long-term leap forward.

Koo Cheol-mo, CEO of JTC, said, “With the full-scale arrival of the endemic, pent-up demand for travel to Japan has greatly increased, and business normalization is progressing rapidly. Once group tours by relatively high purchasing power Chinese tourists resume, we expect to achieve performance exceeding previous years immediately.”

He added, “During the past pandemic, competitors in Japan’s duty-free industry faced closures due to deteriorating profitability, but JTC focused on anticipating reopening and strengthening market dominance. JTC, which still maintains group tour infrastructure nationwide in Japan, will solidify its position as the number one duty-free shop operator in Japan.”