"Strong Main Business, but Subsidiary Slump"… Hyundai Home Shopping's Q1 Operating Profit Down 19%

Strong Performance in Beauty and Fashion Sectors
Standalone Profits Rise for Home Shopping
Operating Profit at Subsidiary Hyundai L&C Plunges 80%

Hyundai Home Shopping reported lackluster results in the first quarter of this year, primarily due to poor performance by its subsidiaries.

According to the Financial Supervisory Service's electronic disclosure system on May 7, Hyundai Home Shopping's consolidated operating profit was KRW 48.1 billion, down 18.6% compared to the same period last year. Revenue amounted to KRW 959.9 billion, a decrease of 3.5% over the same period. Net profit dropped by 72% to KRW 33.8 billion.

Hyundai Home Shopping's consolidated results include the standalone performance of Hyundai Home Shopping, as well as the results of its subsidiaries: construction materials company Hyundai L&C (100% stake), fashion company Handsome (40.5% stake), and ICT specialist Futurenet (78.5% stake).

On a standalone basis, Hyundai Home Shopping posted revenue of KRW 268.8 billion and operating profit of KRW 25.5 billion. While revenue fell by 9% compared to the first quarter of last year, operating profit grew by 24%. A Hyundai Home Shopping representative explained, "Operating profit for the standalone home shopping business increased significantly as we reduced high-priced product categories such as furniture and rentals in response to changing customer trends, and instead expanded our lineup of beauty and fashion products."

However, the deepening slump at subsidiaries Hyundai L&C and Handsome led to a decline in consolidated results. Hyundai L&C's revenue was KRW 252.9 billion, down 4.4% over the same period, and operating profit shrank by 80% to KRW 1.6 billion. Handsome posted revenue of KRW 380.3 billion and operating profit of KRW 21.7 billion, representing decreases of 3.4% and 33.1%, respectively.

A Hyundai Home Shopping representative stated, "Due to the sluggish construction market, the volume of new project starts has decreased this year. In addition, abnormal weather conditions and weakened consumer sentiment led to declines in both revenue and operating profit at our subsidiaries."