Q3 sales reach 3.36 trillion won
Revenue up 9.5% on-year as new orders boost all business units
CJ Logistics said Tuesday its third-quarter sales reached 3.36 trillion won ($2.47 billion) on a consolidated basis, while operating profit came in at 110.5 billion won, according to a regulatory filing. Sales rose 9.5 percent from a year earlier, extending the company's growth streak, but operating profit fell 25.3 percent as a shift in the Chuseok holiday timing, higher investment spending and a deteriorating external environment weighed on earnings.
In the parcel delivery unit, known as O-NE, sales grew 1.2 percent on-year to 976.5 billion won. The Chuseok holiday, which fell in the fourth quarter last year, moved into the third quarter this year and reduced the number of operating days, but the division sustained its revenue growth through the expansion of its daily delivery service "Maeil O-NE," the personal parcel service "Bonae O-NE" and flexible hub terminal operations.
Operating profit for the unit dropped 39.5 percent on-year to 38 billion won. The company attributed the decline to fewer operating days caused by the holiday timing shift and investment costs aimed at strengthening service competitiveness, including flexible hub terminal operations for service upgrades.
The contract logistics unit posted sales of 933 billion won, up 8.3 percent from the same period last year. Sustained volume growth from existing strategic customers, combined with new order wins, drove broad-based expansion across the unit's key businesses, including fulfillment operations and middle-mile transportation.
Operating profit for the unit, however, fell 11 percent on-year to 49.2 billion won, hurt by rising operating costs stemming from external headwinds.
The global unit recorded sales growth of 13.1 percent on-year, driven by solid performance in strategic markets including the United States, India and Vietnam, as well as an increase in cross-border e-commerce volume. Contract logistics in those strategic markets and cross-border e-commerce both posted double-digit growth, leading the unit's overall expansion.
Operating profit for the global unit, however, fell from a year earlier to 11.8 billion won, as prolonged external uncertainty and temporary costs from expanding its global network weighed on the bottom line.
The global unit plans to focus on volume growth and profitability improvement in its key markets, including the United States, India and Vietnam. In India, the company intends to enter the business-to-consumer fulfillment market in earnest, targeting the local e-commerce sector, which is projected to grow at an average annual rate of 9 percent. In Southeast Asia, it aims to secure orders from regional leading companies and apply technology and operational expertise proven in South Korea to sharpen its competitiveness in the global contract logistics business.
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