Operating Profit Turns to Surplus in Q3
First Surplus Since 2019, Graphic=Bizwatch, “Namyang Dairy Products has successfully returned to an operating and net profit surplus for the first time in 20 quarters. This turnaround comes just six months after Chairman Hong Won-sik, who was embroiled in multiple controversies such as abuse of power and embezzlement, left the company and it was reorganized under Hahn & Company.”,
“Namyang Dairy Products announced on the 14th that its consolidated operating profit was 509 million KRW for the third quarter, marking a return to surplus. During the same period, net profit also turned to a surplus of 40 million KRW. Compared to the previous quarter, which saw a deficit of around 16 billion KRW, this is a significant reversal.”
“Individual performance also improved significantly with an operating profit of 2.314 billion KRW and a net profit of 1.04 billion KRW, achieving a return to surplus. However, sales lingered at 242.685 billion KRW, a 4.5% decrease from the previous year, due to economic downturn and low birth rates.”
“This is the first time in 20 quarters since Q2 2019 that Namyang Dairy Products recorded a quarterly surplus in operating and net profit. The company saw a change in its largest shareholder to Hahn & Company at the end of January and started anew with a new board of directors formed at the regular shareholder meeting in March.”
“This return to surplus is attributed to the effective management strategy focused on enhancing profitability following the change in the largest shareholder. Since the new board’s establishment, Namyang Dairy Products has strengthened responsible management and boldly reorganized underperforming businesses, including some food service operations and products. The company also engaged in management reform activities such as restructuring business operations and reducing costs and expenses.”
“They are also engaging in activities to enhance shareholder value. In June and October, the company announced plans to repurchase its own shares worth approximately 20 billion KRW each. In September, it canceled 40,269 shares (approximately 23.1 billion KRW) to strengthen shareholder returns. During the October shareholder meeting, a 10-to-1 stock split, changing the par value of shares from 5,000 KRW to 500 KRW, was decided. Namyang Dairy Products is currently in a state of suspended stock trading to conduct this stock split, with trading set to resume on the 20th.”
“A Namyang Dairy Products representative stated, ‘The operating profit surplus in the third quarter is the result of focusing all organizational efforts on business restructuring and cost reduction to maximize profitability. Moving forward, we will continue to strengthen responsible management, enhance shareholder value activities, and operate a profitability-centered business portfolio to focus on normalizing operations.'”