July 27, 2024

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CJ CheilJedang's Bibigo dumpling products (CJ CheilJedang)

Korean food giant CJ CheilJedang beat earnings estimates in the first quarter of this year, largely driven by increased overseas sales.

According to its regulatory filing Tuesday, the company posted 4.44 trillion won ($3.24 billion) in sales and 267 billion won in operating profits in the first months of the year. Its profits alone surged 77.5 percent from the same period last year.

Its flagship food business reported 2.83 trillion won in sales and 184.5 billion won in operating profits, up 2.6 percent and 37.7 percent, respectively, from a year ago.

Almost half the food sales, amounting to 1.37 trillion won, came from overseas markets, especially the US.

In the US, products like Bibigo dumplings and Schwan's Red Baron – a pizza brand the company acquired in 2019 – secured leading positions in their product segments. Sales of frozen rice products also saw a 23 percent increase due to the heightened demand among US consumers.

The company also saw sales growth of 45 percent in Europe and 70 percent in Australia, where it recently started distributing its products through major retailers. Frozen chicken and instant rice products, in particular, enjoyed popularity in the regions, it said.

In the meantime, its bio business, CJ CheilJedang recorded sales of 1.22 trillion won and operating profits of 978 billion won over the same period, reflecting a 3 percent increase and a 55 percent increase, respectively. This growth follows a restructuring strategy focused on high-value-added items such as specialty amino acids.

CJ CheilJedang said it will further focus on its efforts to expand overseas operations, attributing the increased operational profits to strong global sales.

"We will continue to accelerate our overseas expansion to become a leading global player and pursue efforts for 'maximizing profitability,'" a CJ CheilJedang official said.

Looking ahead, CJ CheilJedang plans to establish a French unit, following expansions in the UK, Australia, and Thailand, aimed at capitalizing on the Paris 2024 Olympics in June.

By Hwang Joo-young (flylikekite@heraldcorp.com)