'Strong Performance in Foodservice and Ingredient Business' CJ Freshway's Q2 Operating Profit Down 14%... "Impact of Online Investment"

Second-Quarter Operating Profit at 23.5 Billion Won, Down 14.2% Year-on-Year
Sales Up 4.5%, GMV Up 13.3%
Stable Growth Across All Business Segments
"Strengthening Platform Competitiveness Through Strategic Resource Allocation"

CJ Freshway has succeeded in rebounding sales in its core food material distribution and foodservice businesses, but profitability has declined due to investments in its online platform aimed at securing future growth drivers.

CJ Freshway Yangsan Logistics Center. Provided by CJ Freshway

CJ Freshway announced on August 6 that, on a consolidated basis, its operating profit for the second quarter of this year was tentatively tallied at 23.5 billion won, a 14.2% decrease compared to the same period last year. During the same period, sales rose 4.5% to 923.2 billion won, and Gross Merchandise Value (GMV), which refers to total transaction volume, increased 13.3% to 1.3629 trillion won.

A representative from CJ Freshway explained, "Despite a challenging business environment, including a slowdown in the dining-out market, all segments of our food material distribution and foodservice businesses grew evenly, maintaining a stable business foundation." However, the company added, "Operating profit declined because of strategic resource allocation to secure a market lead in online distribution and to strengthen our platform competitiveness."

By segment, second-quarter sales from foodservice ingredients and food material distribution reached 418.4 billion won. Of this, online business sales increased 51% year-on-year. The growth of Sikbom, a business-to-business (B2B) food material platform in which CJ Freshway acquired a stake in March, also contributed. Performance of integrated delivery products, which combine CJ Freshway’s logistics competitiveness with the Sikbom platform, more than doubled. As a result, Sikbom’s second-quarter GMV reached a cumulative 151.3 billion won, up 25.8% year-on-year. In addition, sales in the food material segment rose 14.3% year-on-year, and franchise channel GMV sales grew 11%.

During this period, sales from the foodservice business reached 498.3 billion won. In the foodservice ingredient segment, sales expanded mainly through the kids and school meal channels, while the group dining segment grew 4.9% year-on-year. Notably, the scale of new orders increased by 43.7%, with CJ Freshway securing a series of new business locations, including military catering for the Army Training Center and the 1st Marine Division. Concession channel sales increased 21% year-on-year.

In the second half of the year, CJ Freshway plans to further strengthen its online business competitiveness, centered on Sikbom, while also focusing on enhancing product and logistics services to improve customer convenience and operational efficiency.

Seongcheol Lim, Chief Financial Officer (CFO) of CJ Freshway, said, “With our online platform business centered on Sikbom as the axis of future growth, we will provide optimized services to both customers and sellers, leading the digital ecosystem of the food material distribution market. By making planned investments to reinforce the core competitiveness and unrivaled capabilities of our food material distribution and foodservice businesses, we will build a foundation for sustainable growth.”

This content was produced with the assistance of AI translation services.