[Edaily Reporter kim mi-kyung ] CJ CheilJedang Corp continued its revenue growth in the second quarter of this year, driven by expanded sales in its overseas K-food and bio businesses. However, profitability deteriorated as cost pressures increased due to high oil prices and rising raw material costs.

CJ CheilJedang Corp(097950)The company announced on the 11th that it recorded revenue of 4.195 trillion won and operating profit of 161.9 billion won in the second quarter of this year (excluding CJ LOGISTICS). While revenue increased by 10.2% year-over-year, operating profit decreased by 18.5%. On a consolidated basis, including its subsidiary CJ LOGISTICS, revenue totaled 7.3621 trillion won, and operating profit stood at 257.6 billion won.

Analysts attribute these results to the “K-Food” craze in overseas markets and expanded sales in the bio business driving overall revenue growth, while profitability was hampered by cost pressures stemming from sluggish domestic demand and external headwinds such as high oil prices and a strong won.

Revenue for the Food Business Division rose 5.8% to 2.8441 trillion won. Operating profit fell 21.3% to 70.9 billion won. The overseas food business drove these results. Overseas revenue increased 10.1% to 1.5072 trillion won. The company explained that this was largely due to expanded sales of Global Strategic Products (GSPs) such as dumplings and Haetban.

By region, sales in the Americas rose 10% as sales through mainstream channels, centered on dumplings and Haetban, increased. Europe grew 19% due to strong sales of dumplings, chicken, and noodles, while the Asia-Pacific region saw a 21% increase, driven by expanded sales of ambient and frozen products such as dumplings, rolls, and seaweed. In China, sales also rose 5% as sales of dumplings and frozen rice balls increased.

Domestic food business revenue also rose 1.4% to 1.3369 trillion won. Although adverse factors persisted—including sluggish domestic demand, cost pressures in the materials business due to the strong won, and falling selling prices—sales of new health and wellness (H&W)-focused products offset these challenges.

However, profitability deteriorated. Operating profit for the food business fell 21.3% year-over-year due to a combination of higher packaging costs driven by high oil prices and rising raw material prices.

The Bio business division saw revenue rise 20.8% to 1.3509 trillion won, while operating profit fell 15.9% to 91 billion won. Revenue rose significantly as sales of specialty amino acids—such as arginine and isoleucine—and key products like lysine increased. However, operating profit declined due to intensifying competition in the high-margin tryptophan market and a base effect resulting from last year’s strong profitability. Nevertheless, operating profit showed signs of recovery, increasing by 85.5 billion won compared to the previous quarter.

In non-operating items, the company recorded a net loss of 23.9 billion won, reflecting losses from foreign exchange transactions and derivative instrument valuations due to rising exchange rates and grain prices.

CJ CheilJedang Corp. plans to accelerate its performance improvement in the second half of the year by rebalancing its business divisions. The Lifestyle Foods division intends to expand global sales of flagship GSP products such as dumplings and Haetban, while in the domestic market, it will defend profitability through a sales strategy focused on high-margin categories. The Technology Materials division will expand revenue from new businesses, and the Core Materials division will work to improve performance by capitalizing on changes in the external environment. The company will also concurrently reduce manufacturing costs and fixed expenses.

A CJ CheilJedang Corp spokesperson said, “We will accelerate the expansion of K-food into new global markets by leading with global strategic products such as dumplings and Haetban, and we will focus on improving profitability by expanding sales in the bio business and reducing manufacturing costs and fixed expenses.”