Impact of Hansomeon and FutureNet Subsidiary Inclusion
Improvement in Home Shopping Standalone Performance
Hyundai Home Shopping announced on the 7th that its consolidated operating profit for the first quarter of this year reached 58.3 billion KRW, a 247.4% increase compared to the same period last year.
During the same period, sales amounted to 997.01 billion KRW, up 101.7%, and net profit recorded 119.858 billion KRW, a 45.6% increase.
The improved performance compared to the same period last year was due to the new inclusion of Hansome and Hyundai Futurenet as subsidiaries. Before their inclusion as subsidiaries, their performance was only reflected in equity-method earnings, but after becoming subsidiaries, all profits and losses including sales and operating profit are reflected in the results.
Hyundai Home Shopping increased its stake in Hansome, a fashion specialist company affiliated with Hyundai Department Store Group, through share buybacks and cancellations, and incorporated it as a subsidiary from January this year. Hyundai Home Shopping’s stake in Hansome stands at 39.7%. Hyundai Futurenet, an ICT specialist company of Hyundai Department Store Group, was also incorporated as a subsidiary at the end of last year.
A Hyundai Home Shopping official explained, "The significant increase in consolidated sales and operating profit is due to the new inclusion of Hansome and Hyundai Futurenet as subsidiaries under accounting standards."
Existing subsidiary Hyundai L&C, a building materials company, also saw improvements in domestic sales of windows and interior stone. Hyundai L&C’s sales for the first quarter of this year were 264.5 billion KRW, a 15.9% increase compared to the same period last year, and operating profit turned positive during the same period.
Hyundai Home Shopping also posted improved results on a separate basis. Its separate net sales for the first quarter of this year were 295.5 billion KRW, an 11.1% increase compared to the same period last year. Operating profit during the same period rose 14.9% to 20.6 billion KRW. However, handled sales decreased by 4.8% compared to the same period last year, recording 896.8 billion KRW.
Regarding this, Hyundai Home Shopping explained, "Handled sales decreased due to a reduction in the composition of handled products such as rentals and installed furniture," but added, "Gross profit increased due to strong performance in domestic travel, kitchen, and insurance products, and operating profit increased as the operating profit margin improved."
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