CJ Logistics operating profit rises 10 percent as AliExpress orders pour in

CJ Logistics's operating profit rose to 10.4 percent to 109.4 billion won due to rising volume of overseas e-commerce parcels, falling short of market expectations.

CJ Logistics' delivery trucks are parked in downtown Seoul on Aug. 13, 2023. [NEWS1]

CJ Logistics recorded a 10.4 percent increase in operating profit in the first quarter to reach 109.4 billion won ($800 million), according to its electronic disclosure on Friday, owing to the rising volume of overseas e-commerce parcels.

Still, the figure fell short of the market expectation of 117.7 billion won, according to data compiled by market tracker FnGuide.

The logistics firm, the largest in Korea, reported revenue of 2.92 trillion won for the quarter, a 4 percent increase compared to the same period last year.

The company's quarterly net profit saw a 14.5 percent year-on-year increase to land at 55.4 billion won underperforming analysts' expectations of 58.8 billion won.

By segment, revenue of the parcel and e-commerce businesses grew by 2.9 percent on year to reach 937 billion won, with operating profit increasing by 8.5 percent to 53.5 billion won.

“Increased purchases from overseas and volume in the fashion and beauty categories, coupled with the accommodation of new sellers from e-commerce platforms, contributed to the fiscal results,” CJ Logistics explained. “Despite initial costs related to the new fulfillment center setup, the growth in high-profit customer-centric volume and the optimization of delivery networks have driven the increase in operating profits.”

The logistics unit of the Seoul-based CJ Group handles 80 percent of domestic delivery volume for the Chinese online shopping platform AliExpress.

In the contract logistics business, revenue increased by 2.6 percent on year to 696.8 billion won, with operating profit rising by 18 percent to 41.3 billion won.

Revenue of the overseas business, including forwarding services, expanded by 3.9 percent on year to 1.08 trillion won while operating profit decreased by 17.1 percent to 11.6 billion won.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]