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Biz News Korea(Eng)
Dongwon F&B 2Q OP misses market expectation on subsidiaries’ weak performance
- Collected
- 2017.08.02
- Distributed
- 2017.08.03
- Source
- Go Direct
Dongwon F&B Tuesday said it earned 8.7 billion won ($7.8 million) in operating profit on a consolidated basis during the second quarter ended June, 25.5 percent lower from a year ago despite a 15.4 percent on-year gain in sales to 588.8 billion won. Its net income also plunged 67.7 percent to 2.6 billion won over the same period.
The company’s operating profit and net income all came way below market expectations of 13.6 billion won and 9.6 billion won, respectively.
“The market expected that the strong sales of dairy products and frozen foods (of its subsidiaries) would help offset the cost burden on the firm caused by rising tuna prices,” said Park Ae-ran, a researcher at KB Securities Co. “But its earnings fell short of the expectations” largely due to a fall in profits of its subsidiaries, in particular, Dongwon Home Food that has increased spending to expand its customer base following resilient growth in the past few years.
Shares of Dongwon F&B Tuesday fell upon the disclosure of its performance for the second quarter and closed down 5.1 percent at 205,000 won on Tuesday from the previous session.
But market analysts suggested a buy on dips for Dongwon F&B, citing the growth potential of new businesses that its subsidiaries Dongwon Home Food and Dongwon Farm have invested, as well as solid sales of Dongwon F&B’s new products.
As of 2:20 p.m. Wednesday, shares of Dongwon F&B were 8.29 percent up at 222,000 won.
By Ko Min-suh
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]