CJ Freshway Operating Profit Down 30% on Increased Platform Investment

Operating profit fell 29.2% year over year to KRW 23.8 billion

CJ Freshway said on Nov. 5 that it recorded revenue of KRW 961.4 billion and operating profit of KRW 23.8 billion in the third quarter (July-September) of this year. Revenue rose 6.7% from the same period last year, while operating profit fell 29.2%. Gross merchandise value (GMV) for the third quarter totaled KRW 1.4371 trillion, up 16.9% year over year.

CJ Freshway said its revenue and GMV grew as it expanded its online food-ingredient distribution and group catering businesses. It added that operating profit reflected investments to grow its platforms and expand its customer and seller bases, while its key businesses maintained growth despite the continued slowdown in the dining-out market.

A view of CJ Freshway's Yangsan logistics center. Photo courtesy of CJ Freshway.

By business segment, revenue from food-ingredient distribution for restaurants and food-ingredient distribution totaled KRW 446 billion.

Revenue from the online business increased 226.6% year over year. The growth is attributed to an expanded product assortment and logistics services, led by Sikbom, the company’s online food-ingredient platform. The number of products available for integrated delivery more than doubled from the third quarter of last year, while spending per store rose 14.3%. CJ Freshway said Sikbom’s third-quarter transaction value (GMV) reached KRW 113.5 billion, surpassing KRW 100 billion for the first time in a single quarter, thanks to stronger competitiveness in its online-to-offline (O2O) business, which combines nationwide logistics infrastructure with the Sikbom platform.

Revenue in the food-ingredient business rose 15.7% year over year, driven by growth in key products such as dairy products. In the restaurant food-ingredient business, revenue from the franchise channel increased 9.4% as distribution volumes grew among both new and existing clients.

Revenue from the catering business rose 6.3% year over year to KRW 509.3 billion. The group catering segment grew, particularly in the corporate cafeteria and hospital channels. Revenue from Fresh Meal On, a kitchenless model that provides meal services without location constraints, also increased 52.5% year over year. In catering food-ingredient distribution, channels such as childcare and schools continued to grow.

CJ Freshway said it plans to strengthen Sikbom’s product and logistics competitiveness and focus on expanding its customer and seller bases in the fourth quarter, growing transaction volumes while accelerating the platform business. In the catering business, it will continue to reorganize its portfolio around profitability and improve operational efficiency, while pursuing growth supported by stronger earnings.

“We will enhance our customer relationship management (CRM)-based marketing and refine our revenue model by accelerating online business growth through stronger product competitiveness and logistics services,” said Im Seong-cheol, chief financial officer (CFO) of CJ Freshway. “Beyond the online business, we will continue to improve operational efficiency in existing businesses, including the kitchenless model, to sustain sound growth.”

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