CJ Logistics Q2 OP up 58% on qtr on brisk overseas operation, parcel delivery

2019.08.08 15:12:47

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South Korea’s biggest parcel delivery service provider CJ Logistics Corp. posted a 58.3 percent on-quarter surge in operating profit in the second quarter ended June this year on the back of service charge hikes in package delivery business and sound overseas operation.

CJ Logistics announced in a regulatory filing on Thursday, its operating profit on a consolidated basis from April to June amounted to 71.8 billion won ($59.3 million), up 58.3 percent from the previous quarter and 25.7 percent from the same period a year ago. Sales rose 4.2 percent on quarter and 11 percent on year to 2.53 trillion won. The company swung to a net profit of 17.4 billion won from a loss of 12.8 billion won in the previous quarter, which also soared 158.6 percent against a year ago period.

As of 2:42 p.m. on Thursday, shares of CJ Logistics surged 7.25 percent to 140,500 won.

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The company’s contract logistics business saw its gross sales profit rise 5 percent from a year earlier to 63 billion won in the second quarter. The parcel delivery business raked in 64.2 billion won in gross profit on sales, up 9.5 percent on year thanks to the 4.7 percent bump in service charge to 2,000 won from 1,911 won on average. Its market share by logistics volume fell 2.3 percentage points from a year ago to 46.9 percent, but that by sales edged up 0.1 percentage point to 43 percent.

The company’s gross margin from overseas business jumped 23.7 percent to 93.2 billion won over the same period, as the earnings of the U.S.-based DSC Logistics that it took over in the third quarter last year reflected in the second-quarter balance sheet. The gain was also driven by robust performance of its global subsidiaries.

Its construction business generated 14.2 billion won in gross margin, down 0.7 percent from a year ago.

CJ Logistics attributed its strong performance to sound overseas business boosted by aggressive acquisitions of global multinational companies and brisk sales from the package delivery service. The company’s business-wide efforts to enhance profitability and efficiency also paid off, it added.

By Kim Gi-jung and Choi Mira

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