SOUTH KOREA. The Shilla’s travel retail business remained in the black for its second quarter ended 30 June as operating profit reached KRW36.4 billion (US$25.7 million) compared to a KRW11.3 billion (almost US$8 million) deficit in the same period last year.
This was the second straight positive three-month performance for the business following six successive negative quarters.
The improved return (up +198.3% quarter-on-quarter) came despite a -9.1% year-on-year decline in revenue to KRW772.6 billion (US$542.6 million) for the quarter.
The much-improved bottom-line performance tells its own story, one that will encourage The Shilla leadership to focus increasingly on profitability rather than chasing top-line revenue excessively
That decline was prompted by a hit to airport revenue, in turn caused by The Shilla Duty Free’s exit this March from its loss-making Incheon International Airport DF1 concession.
Largely as a result, sales in the airport channel were off by -17.4% year-on-year to KRW401.9 billion (US$284 million). But the much-improved bottom-line performance tells its own story, one that will encourage The Shilla leadership to focus increasingly on profitability rather than chasing top-line revenue excessively.
Downtown duty-free revenue increased by +2.0% year-on-year to KRW370.7 billion (US$261.9 million), an almost +5% quarter-on-quarter gain.
Looking to Q3, Hotel Shilla said it is focusing on profitability recovery in response to changes in the internal and external environment and the travel retail market. ✈
