South Korean parcels and logistics carrier CJ Logistics saw a y-o-y revenue fall of -1.7% to KRW 2.8tn (€1.9bn) in the first quarter of 2023. However, operating profit grew by +30.9% in the quarter to KRW 99bn (€67.8m). The company put the fall in revenues down to a softening of global demand for freight forwarding and increase in profit due to the success of its Parcels and E-commerce as well as its Contract Logistics division.
CJ Logistics’ Parcels and E-commerce Division saw a 36.1% growth in gross profit y-o-y to KRW 120bn (€82.7m) on revenue growth of +7.6% to KRW 910.8bn. This was due to a large new customer win in its E-commerce sub-division that resulted in a 62.1% volume increase to 1.4m parcels being fulfilled in the quarter. Some 393m parcels were handled by the Parcels subdivision, a 0.6% y-o-y growth in volumes.
Its other successful division in the quarter was Contract Logistics. This operation also saw a growth of +5% in revenue, this time to KRW 679.4bn (€465m) and a +15% hike in gross profit to KRW 79.5bn (€54.4m). It benefitted from greater sales in pharmaceuticals and restaurant supplies as well as greater volumes of throughput from existing clients.
Revenue and profit fell in CJ Logistics freight forwarding (Global) division, which the company put down to a softening in demand for global freight forwarding. It saw a -16.8% y-o-y drop in revenue to KRW 1.036tn (€7.1bn) and an operating profit drop of 18% to KRW 14bn (€9.6m).
The company projects that revenues and profits in the freight forwarding division are set to grow from the second quarter this year as demand increases globally. In the second quarter the freight forwarding division was focused on growing its network of large customers in India, and developing its consumer goods volumes in both India and Malaysia. CJ Logistics says that profitability for the division is also set to improve from structural reform of its US subsidiaries.
Source: CJ Logistics
Author: Richard Shrubb
