Chairman Lee Jay-hyun of CJ Group. (Photos: CJ Group)

CJ Cheiljedang recorded its best-ever operating profit in the second quarter of the year. The earnings surprise was owed to the company’s aggressive investments in the home meal replacement (HMR) and global business sectors ahead of others amidst the protracted COVID-19 pandemic.

In an electronic filing made on Aug. 11, CJ Cheiljedang posted 301.6 billion won in Q2 operating profit, a 186.1 percent jump over the same period one year ago.

The company logged 3.460.8 trillion won in Q2 sales, up 8.6 percent. The Q2 operating profit is tantamount to an earnings surprise, between 200 billion won and 220 billion won above the market consensus of the securities community.

The flagship company of CJ Business Group had a good performance in the food production business and bio business (amino acid for animal feeds and food flavorings).

CJ Cheiljedang saw sales in the food production business surge 12.1 percent over a year ago to 2.191 trillion won, and operating profit jumped to 134 percent to 126.4 billion won.

Q2 sales in the bio business stood at 742.9 billion won, similar to that of a year ago.

The operating profit of the bio business soared 87 percent over a year ago to 110.9 billion won on the back of a raise in profitability of value-added substances, developed on its own like nucleic acid tryptophan.

The global business also played a big part. CJ Cheiljedang’s global strategy dates back to November 2018. At that time, the company acquired the U.S. frozen food maker Schwan’s Company for 1.5 trillion won.

Some group officials said the acquisition money was too burdensome, but CJ Group Chairman Lee Jay-hyun opted to buy it.

CJ Cheiljedang’s acquisition of Schwan’s Company put the whole of the group in a vice. The following year, in 2019, CJ Group declared an emergency management mode.

The group began to undergo financial restructuring by disposing nonessential assets and turning to retrenchment to pay back borrowings.

The group secured more than 1 trillion won in cash by disposing of a real estate lot in Gayang-dong, Seoul, for 850 billion won and a Guro plant site for 230 billion won and the CJ Manpower Center building for 52.8 billion won.

CJ Cheiljedang’s investment into Schwan’s Company has shined this time. Schwan’s Company chalked up 722.8 billion won in Q2 sakes, accounting for 68 percent of total sales in the global business sector and saw its U.S. market increase.

CJ Cheiljedang’s investment into the HMR sector has borne fruits. The company has diversified its product portfolio before the COVID-19 pandemic began to spread globally.

New Yorkers crowd Bibigo Pop-up Store, being run by CJ Cheiljednag in Manhattan.