Popularity of Cafeterias Amid High Inflation... Fresh Start Hyundai Green Food Achieves Record-Breaking Performance

Last Year Sales 2.1872 Trillion KRW, Up 11% YoY
Operating Profit 84.7 Billion KRW, Up 9.8% YoY
US and Mexico Overseas Subsidiaries Sales Also Soar

Hyundai Green Food, which started as a new company last March, recorded its highest-ever performance and received an excellent report card. Thanks to the popularity of domestic and international cafeterias amid high inflation, both sales and operating profit increased by about 10% compared to the previous year.

Cafeteria image. [Image source=Yonhap News]

Hyundai Green Food announced on the 7th that its consolidated sales last year reached 2.1872 trillion KRW, an 11% increase from 1.9712 trillion KRW the previous year. Operating profit during the same period also rose 9.8% from 77.1 billion KRW to 84.7 billion KRW.

Hyundai Green Food is a newly established corporation through a spin-off last March and has no previous year performance. However, to aid market understanding, the performance was restated by removing the consolidated results of the spin-off surviving company, Hyundai G.F. Holdings Co., Ltd., from the consolidated results of the pre-spin-off company, Hyundai Green Food Co., Ltd., for comparison.

Operating profit showed strong results with 10.5 billion KRW in Q1, 27.9 billion KRW in Q2, and 28.4 billion KRW in Q3, but turned to a loss of 1.9 billion KRW in Q4. A Hyundai Green Food official explained, "Operating results were favorable due to increased sales in the core businesses of catering and food distribution, but profits temporarily declined in Q4 due to increased selling and administrative expenses." Selling and administrative expenses in Q4 rose by 10.1 billion KRW to 74.4 billion KRW compared to the previous year.

Hyundai Green Food’s strong annual performance was largely influenced by the popularity of cafeterias due to 'lunchflation.' As the COVID-19 endemic phase led to more employees returning to offices, while dining-out prices soared, relatively affordable group catering became very popular.

As a result, Hyundai Green Food successfully secured new large-scale contracts mainly with IT companies last year. Over the past year, it has been operating group catering services for over 40 companies including Naver and Neople. In November last year, it also signed a group catering supply contract for Hyundai Motor’s Gangnam office building.

Increased performance from overseas catering subsidiaries also contributed. Overseas sales last year reached 115 billion KRW, surpassing the 100 billion KRW mark for the first time. Sales increased at the Dos Bocas refinery construction site in Mexico, and catering services began at the electric vehicle factory construction site in Savannah, USA, resulting in sales growth of 47.9% and 84.3% for the Mexico and USA subsidiaries, respectively.

A Hyundai Green Food official said, "Thanks to the strong performance of core businesses such as expanding global group catering operations including in the USA and Mexico, both sales and operating profit achieved record highs."

Hyundai Green Food is expected to continue its growth next year, supported by the expanding group catering market amid economic slowdown. Nam Sung-hyun, an analyst at IBK Investment & Securities, said, "As the economic slowdown continues, demand for food services in manufacturing and office sectors is likely to increase, leading to expanded new orders centered on group catering. With stabilized catering prices, margins are expected to improve, and overseas business also appears likely to grow."