South Korea’s top beauty brand maker AmorePacific Group that relies heavily on beauty product and duty-free outlet sales was hit hard by a plunge in Chinese visitors to Korea amid the ongoing diplomatic row between Korea and China over Seoul’s deployment of an U.S. antimissile system.

AmorePacific Group (AmoreG) Thursday reported that operating profit for the second quarter ended June reached 130.4 billion won ($116.2 million) on sales of 1.41 trillion won. The corresponding figures are down 57.9 percent and 17.8 percent from a year earlier. Its net profit also plummeted 60 percent to 100 billion won. In the first half of this year, the group’s operating profit also skid 30.2 percent to 508.9 billion won while sales fell 6.1 percent to 3.27 trillion won.

Shares of AmorePacific closed Wednesday at 284,000 won, down 3,500 won or 1.22 percent from the previous session.

The group blamed its poor second-quarter performance to a prolonged slump in domestic spending and a fall in the number of foreign visitors to Korea. In particular, a plunge in Chinese tourists visiting Korea following Beijing’s ban on the sale of packaged tour programs to Korea by its travel agencies took a heavy toll on the company’s performance, leading to a sharp fall in sales of its duty-free shops that have heavily relied on Chinese tourists’ spending. China has yet to lift the travel ban.

As a result, its key beauty product subsidiary AmorePacific Corp. also reported a 32.3 percent on-year drop in operating profit of its domestic business to 316.6 billion won in the March-June period and a 10.1 percent fall to 1.91 trillion won in sales. Especially, its duty-free sales declined 14.7 percent over the same period. The growth in its overseas business has also slowed down with operating profit falling 16 percent to 107.9 billion won despite a 7.3 percent gain in sales to 885.5 billion won.

This is a stark contrast to the beauty giant’s archrival LG Household & Health Care that delivered its record-high performance statement for the same quarter a day before. The rival’s operating profit and net profit both rose hundreds of billions won from a year ago despite the drop in sales.

By Kang Da-young

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