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HiteJinro headquarters (Photo: HiteJinro) |
[Alpha Biz= Paul Lee] HiteJinro has recorded a sharp increase in impairment losses in its beer business, with the size of the impairment more than tripling year-on-year, as declining sales volumes offset price hikes and drove a steep drop in profitability.
According to regulatory filings on March 20, the company raised domestic beer shipment prices for brands such as Terra, Kelly, and Hite by 2.9% last year, from 27,195 won to 27,983 won per case. However, external beer sales fell 7.9% to 758.1 billion won, indicating a significant decline in sales volume.
As a result, operating profit in the beer segment plunged 75% to 8.6 billion won from 34.3 billion won a year earlier, despite the price increase.
HiteJinro determined that the value of its beer brands and related goodwill could no longer be fully recovered through future cash flows, leading the company to recognize substantial impairment losses.
In contrast, the soju business remained relatively resilient. The domestic shipment price of Chamisul has been frozen at 33,450 won for three consecutive years. Although operating profit in the soju segment declined 5.9% to 167.2 billion won, it accounted for 97% of the company’s total operating profit of 172.3 billion won last year.
Excluding the soju division, the rest of HiteJinro’s businesses generated only 5.1 billion won in operating profit, highlighting the growing dependence on its core soju segment as the beer business continues to struggle.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
