Sustained Growth in Overseas Food... Operating Profit Up Over 50%
Increasing Specialty Share Amid Bio and FNT Market Slump
CJ CheilJedang experienced an overall decline in profitability in the first quarter of this year due to sluggish domestic consumption and ongoing cost pressures since last year. However, its overseas food business and the high-margin specialty sectors within the Bio and FNT (Food & Nutrition Tech) divisions continued to grow. Notably, the overseas food business saw significant increases in both sales and operating profit, with overseas sales accounting for nearly half of the total food business revenue. Despite challenging market conditions, the Bio and FNT divisions enhanced their business portfolios by increasing the proportion of high-margin specialty products.
CJ CheilJedang announced on the 8th through a public disclosure that its consolidated operating profit for the first quarter of this year was approximately KRW 252.781 billion, down 42.0% compared to the same period last year. During the same period, sales increased by 1.3% to KRW 7.0712 trillion, while net profit fell sharply by 80.1% to KRW 49.317 billion. Excluding CJ Logistics, sales rose 2.1% year-on-year to KRW 4.4081 trillion, but operating profit dropped 58.8% to KRW 150.4 billion.
By business segment, the food division recorded sales of KRW 2.7596 trillion and operating profit of KRW 134 billion. Profitability declined due to sustained cost pressures and reduced sales volume caused by weakened consumer sentiment. However, the overseas food business posted over 15% growth in sales and more than 50% growth in operating profit. The share of overseas sales in the total food business expanded to 49%. In particular, strong growth continued in key markets including the United States, centered on Bibigo’s Global Strategic Products (GSP), with profitability improving through cost structure and productivity enhancements.
By country, K-food market expansion continued in the United States, where GSP sales increased by about 30%, and in Europe, where the business footprint has recently expanded by 41%. In the U.S., B2C channel dumpling sales rose 46%, solidifying a market share of 48% and maintaining the top position, while pizza sales increased by 28%. In Europe, the influence of K-food expanded mainly around the flagship dumpling products.
The bio business, primarily focused on amino acids for feed additives, recorded sales of KRW 817.4 billion and operating profit of KRW 12.8 billion. The sluggish demand was largely due to the global livestock market downturn not yet fully recovering, resulting in decreased sales volume and price declines for major products such as lysine. The FNT business, which focuses on seasoning and future food materials, posted sales of KRW 174.5 billion and operating profit of KRW 50.3 billion, affected by temporary demand stagnation among key customers in the food and seasoning industries.
Meanwhile, despite unfavorable market conditions, the Bio and FNT divisions further refined their business portfolios by increasing the share of high-margin specialty products. Combined sales of specialty items in these two divisions rose 17% year-on-year, and their share of operating profit exceeded half. CJ Feed & Care, the independent feed and livestock corporation, recorded sales of KRW 656.6 billion and a loss of KRW 46.7 billion. Profitability worsened due to continued cost pressures from high grain prices in the livestock sector and declining pig prices in Vietnam, a major business country.
CJ CheilJedang plans to focus on strengthening business competitiveness through global expansion. In the food sector, it will accelerate K-food market expansion centered on GSP items while continuing to launch differentiated new products and pursue cost innovation domestically. The Bio and FNT divisions intend to expand specialty product sales and increase new solution lineups to broaden their business portfolios toward high value-added items.
A CJ CheilJedang representative stated, “We will secure structural competitiveness based on innovative products and core capabilities to lay the foundation for growth despite the challenging business environment.”
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