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| ▲ Nongshim's flagship instant noodle products are piled up at a supermarket in Seoul on June 27, 2023. (Yonhap) |
Nongshim-Q2 earnings
Nongshim's Q2 net profit jumps over 60 pct on higher demand, growth in overseas markets
SEOUL, Aug. 11 (Yonhap) -- South Korea's top instant noodle maker Nongshim Co. said Friday its net profit jumped more than 60 percent in the second quarter from a year earlier largely thanks to stronger demand for instant noodles amid high inflation and growth in overseas markets.
Net profit for the three months ended in June was 45 billion won (US$34.1 million), up 60.9 percent from 28 billion won during the same period last year, the company said in a regulatory filing.
Sales rose 10.8 percent to 837.5 billion won and operating profit logged a more than elevenfold increase to 53.7 billion won on-year in the April-June period.
The big increase in operating profit can be attributed to the base effect of the operating loss of its domestic business in the second quarter of last year for the first time in 24 years due to higher ingredient and management costs.
In the first half, Nongshim posted a net profit of 99.2 billion won, up 62.6 percent from a year ago, sales of 1.7 trillion won, up 13.8 percent, and operating profit of 117.5 billion won, up 204.5 percent.
"Sales and operating profit improved as demand for ramyeon products, which are comparatively cheaper, increased amid an economic recession and high inflation," a company official said.
Nongshim also said its overseas business showed robust growth in the first half, noting it raised more than 50 percent of its operating profit outside of South Korea.
In particular, Nongshim raised 33.7 billion won in operating profit in the United States, accounting for 28 percent of the company's total operating profit.
The U.S. business's sales rose 25.2 percent to 316.2 billion won and the operating profit climbed 536 percent to 33.7 billion won in the January-June period from a year earlier.
Nongshim has been working to strengthen its U.S. business by expanding its distribution network and opening its second factory there last year.
Nongshim's sales in Costco and Sam's Club, two major U.S. box stores, rose 47 percent and 95 percent on-year in the first half, respectively, according to the company.
Nongshim added the increase in operating profit in the U.S. market can also be attributed to a price advance last year and a stabilization of international ocean freight charges since October.
Last month, Nongshim CEO Shin Dong-won announced the company's goal to triple its sales in the U.S. by 2030 to top the instant noodle market.
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