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[Alpha Biz=(Chicago) Reporter Kim Jisun] Hite Jinro received a disappointing report card, with its cumulative operating profit halved in the third quarter of this year. Although it succeeded in settling its new beer product Kelly in the market for the first time in four years, it has been hampered by marketing costs organized for Kelly's success.
According to the Financial Supervisory Service's electronic disclosure system on the 14th, Hite Jinro recorded sales of 654.3 billion won and operating profit of 43.4 billion won in the third quarter of this year. Sales and operating profit fell 0.4% and 23.7%, respectively, year-on-year. The company posted sales of 1.8994 trillion won and operating profit of 94 billion won in the first to third quarters. Sales rose 0.5% year-on-year, but operating profit plunged 47.0%.
The sharp drop in Hite Jinro's operating profit was due to a significant increase in "sales and management costs" for product promotion and marketing. Hite Jinro spent a total of 742.3 billion won by the third quarter of this year. This is an increase of 100.8 billion won from 641.4 billion won last year.
The reason why Hite Jinro was forced to raise its sales fees was because of the special position of its new product Kelly, which was released in April. In March 2019, Hite Jinro launched its new product 'Tera'. At that time, Hite Jinro's cumulative sales expenditure for the first to third quarters of 2019 was only 581.5 billion won. This is because Terra has entered the market, replacing the position of its flagship brand, Hite. Hite has been discontinued since the launch of Terra.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
