CJ Freshway sustains top-line growth in Q3; operating profit down 29.2%

[Financial News] CJ Freshway continued to grow its top line, buoyed by strong performance in online food-ingredient distribution and institutional catering. However, operating profit declined as a result of proactive investments to strengthen its platform competitiveness and expand its customer base.
CJ Freshway disclosed on the 5th that third-quarter revenue totaled 961.4 billion won, up 6.7% from a year earlier. Operating profit fell 29.2% year on year to 23.8 billion won. GMV for the same period rose 16.9% year on year to 1.4371 trillion won.
Revenue from the food-service ingredient and food-ingredient distribution businesses came to 446 billion won. Online business revenue increased 226.6% year on year. This was the result of expanding the product range and logistics services around Sikbom, its online food-ingredient platform, and strengthening the platform's competitiveness.
The number of products available for consolidated delivery grew to at least twice the year-earlier level, while spending per location also rose 14.3%.
With stronger competitiveness in its online-to-offline (O2O) business, which combines nationwide logistics infrastructure with the Sikbom platform, Sikbom recorded third-quarter GMV of 113.5 billion won. For the first time, quarterly GMV topped the 100 billion won mark.
The food-ingredient and food-service ingredient channels also continued to grow. In the food-ingredient division, revenue rose 15.7% year on year, driven by growth in core products such as dairy. The franchise channel in the food-service ingredient division also posted a 9.4% increase in revenue as distribution volumes to new and existing clients expanded.
Revenue from the catering business came to 509.3 billion won. The institutional catering segment grew 6.3% year on year, led by company cafeterias and hospitals.
Revenue from the 'Fresh Meal On' kitchenless model, which provides meal services without location constraints, rose 52.5% year on year. In food-service ingredient distribution, channels such as kids and schools showed growth.
CJ Freshway said it would continue to strengthen Sikbom's product and logistics competitiveness in the fourth quarter and focus on expanding its customer and seller base to increase transaction volume, accelerating growth in its platform business.
Im Seong-cheol, chief financial officer (CFO) of CJ Freshway, said, "Just six months after acquiring Sikbom, online GMV surpassed 100 billion won in the third quarter, confirming the growth of the online food-ingredient distribution market. In addition to our online business, we will continue to improve operational efficiency across our existing businesses, including the kitchenless model, and sustain solid growth."


[email protected] Kim Seo-yeon Reporter