JTC Achieves Record Profitability Since Founding... Operating Margin Reaches 15.4%

Japanese duty-free retailer JTC announced on May 22 that it achieved its highest profitability since its founding in fiscal year 2024, marking a full-fledged rebound in business performance.

On May 21, JTC disclosed its finalized FY24 results. On a consolidated basis, the company recorded sales of KRW 308.6 billion, operating profit of KRW 47.5 billion, and net profit of KRW 77.2 billion. These figures represent significant year-on-year increases of 105.8%, 117.1%, and 277.6%, respectively. Notably, both the operating margin (15.4%) and net profit margin (25%) reached record highs.

A JTC representative explained, "Amid a clear recovery in performance since last year, approximately KRW 23.6 billion of the KRW 61.7 billion impairment losses on tangible assets recognized during the pandemic period (FY20?FY21) were reversed in the fourth quarter of last year, which had a positive impact on accounting profits." Impairment losses are recognized when the value of assets declines and future income generation is deemed unlikely, and they apply not only to tangible assets such as stores, factories, and facilities, but also to intangible assets such as goodwill.

Alongside improved performance, the company’s financial structure was also strengthened. As business results improved, temporary tax differences recognized in the past were resolved, resulting in the recognition of approximately KRW 33.3 billion in corporate tax income, which in turn boosted the net profit margin to 25%. In addition, EBITDA, a key indicator of cash generation, surged by 82.5% year-on-year to KRW 59.7 billion, and the EBITDA margin reached 19.3%, demonstrating robust cash generation relative to sales.

JTC is strengthening partnerships with travel agencies, particularly in Southeast Asia including Taiwan and Thailand, to expand sales targeting inbound group tourists to Japan, its core business. At the same time, the company is preparing to open new stores in regions of Japan where it does not yet have a presence. With the Japanese government recently easing visa requirements?such as extending the maximum stay for Chinese group tourists from 15 to 30 days?expectations for increased demand from Chinese tour groups are rising. In response, the company plans to ramp up strategic investments and marketing activities to capture this demand.

Additionally, JTC is working to increase customer inflow by operating direct shuttle buses between the large shopping center 'Doton Plaza' in Osaka’s Dotonbori district and airports. The company is also strengthening its anchor tenant strategy by successfully launching the first Japanese location of the popular Chinese tea beverage brand 'HEYTEA,' attracting both local residents and foreign tourists.

JTC CEO Fumiya Yamamoto stated, "We achieved record profits last year as global tourism flows normalized following the pandemic. To ensure sustainable growth, we plan to further expand our business focused on inbound group tourists to Japan, while also broadening our scope to include individual tourists and local Japanese shoppers."