Hanssem Posts KRW 1.9 Billion in Q3 Operating Profit as Profitability Slows Amid Multiple Factors

Impact of Declining Home Sales and Rising Raw Material and Component Prices
B2C Focuses on Strengthening Competitiveness of High-End Products
Hanssem Nexus Merger to Boost Order-Winning Competitiveness

Hanssem's profitability slowed sharply in the third quarter. This was the result of a combination of internal and external factors, including a restructuring of its business, a decline in home sales, and the burden of raw material prices.

Hanssem said on November 9 that its consolidated provisional operating profit for the third quarter of this year was KRW 1.6 billion, down 76.5% from the same period a year earlier. Revenue fell 19% to KRW 357.6 billion, while net income reached KRW 3.8 billion, marking a return to profitability.

In the third quarter, Hanssem was affected by a combination of internal and external factors. These included one-off expenses arising from its business restructuring, including the merger with Hanssem Nexus; a decline in home sales amid high interest rates and tighter lending rules; and the burden of raw material and component prices stemming from the Middle East.

Hanssem said, "Despite these internal and external factors, we continued to generate profits in an unfavorable market environment by strengthening the competitiveness of our core products and upgrading our product mix."

The B2C business faced cost pressures in the third quarter, while purchases were deferred to the fourth quarter because of the holiday period at the end of September and Ssem Festa in October. Hanssem is steadily defending and growing revenue with products in higher-grade categories, while continuing to improve its high-value product mix across kitchens, bathrooms, and furniture.

The Rehaus division successively introduced higher-grade products in key categories, including kitchens and bathrooms. Among Hanssem's signature kitchen lines, Euro Kitchen, the company launched the new Euro 500. It also introduced Easy Bath 7, its second-generation bathroom solution, with significant improvements to convenience and design.

In its home furnishing division, Hanssem launched a broad range of new, high-functionality products in response to the trend toward relaxation. It strengthened its product lineup across categories with new recliners, the Swiv sofa, and Kids Mattresses for infants and young children.

The B2B division completed its business portfolio restructuring. In the third quarter, one-off expenses, including taxes and public charges and legal·and accounting advisory fees related to the absorption merger of its subsidiary Hanssem Nexus, were temporarily reflected in operating profit.

The merger will enable Hanssem to unify its organization and resources and improve operational efficiency by reducing duplicate costs. The company plans to shift its B2B business toward the mid- to high-end market by combining Hanssem Nexus's expertise and track record in the mid- to high-end interior market with Hanssem's nationwide sales and installation infrastructure.

Hanssem expects to begin realizing synergies from the merger in the fourth quarter. It will move beyond a business structure centered on special housing projects and actively target reconstruction complexes in prime areas of Seoul and the greater Seoul area, as well as the residence and office furniture markets. The company plans to boost its competitiveness in B2B orders by offering end-to-end solutions covering design, sourcing of imported construction materials and furniture, installation, and after-sales service (AS).

A Hanssem representative said, "Despite the challenging conditions and continued internal and external uncertainty in the third quarter, we defended revenue by strengthening our fundamental competitiveness and maintained our stable profit structure, recording profits for 14 consecutive quarters." The representative added, "In the fourth quarter, we will continue to improve our performance on the basis of a stable profit structure, including by capturing consumer demand deferred from the third quarter through major promotions such as Ssem Festa."

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