SOUTH KOREA. Shinsegae Duty Free posted an +80.4% year-on-year rise in second quarter revenues from a low 2020 base to KRW561 billion (US$480.3 million).
For the first six month, sales rose +30% year-on-year to KRW1,039 billion (US$889.6 million).
In operating profit terms Shinsegae Duty Free turned a Q2 2020 loss of -KRW37 billion (-US$31.7 million) into a KRW19 billion (US$16.3 million) profit. Q2 net profit improved from a -KRW112 billion (US$95.9 million) loss last time to a -KRW21 billion (US$18 million) shortfall.
For the first half, the duty free division of the department store giant generated an operating profit of KRW42 billion (US$36 million), compared with a -KRW69 billion (-US$59.1 million) loss in the same period a year earlier.
Net profit for the first half improved from a loss of -KRW155 billion (-US$132.8 million) to one of -KRW12 billion (-US$10.3 million).
Shinsegae Duty Free attributed the improved performance to the build-up to Alibaba’s big 618 (18 June) Shopping Festival in China.
[Martin Moodie visits a Shinsegae Duty Free store at Incheon International Airport on 8 August 2021 in a sadly quiet Incheon International Airport]
Downtown duty free sales increased +62% year-on-year in Q2, while airport sales fell -20% compared with the same period a year earlier.
In a note, BofA Global Research said that Shinsegae’s groupwide Q2 consolidated gross sales of KRW2.31 trillion (+33.5% year-on-year) and operating profit of KRW96.2 billion (vs. a loss of KRW48.6 billion in 2Q20) was +33% ahead of consensus (KRW72billion).
Dubbing the duty free performance as “strong”, BofA noted the high level of daigou activities in April and May ahead of the 618 event.
BofA said that the improved Q2 operating performance in duty free was driven in part by a gross sales recovery and a decline in airport rent costs.
Note: Shinsegae Duty Free Gangnam in Seoul closed permanently on 17 July due to the sustained impact of the COVID-19 crisis.
