SEOUL– E-Mart Inc. on Thursday said its third quarter net income declined 86.7 percent from a year earlier on one-off depreciation costs and recall expenses.
Net income came to 124.3 billion won (US$90.6 million) on a consolidated basis for the three months ending in September, compared with 937 billion won during the same period of last year, the company said in a regulatory filing.
Compared with the previous quarter, however, E-Mart swung to profit.
Operating profit fell 7.3 percent on-year to 100.7 billion won. Sales rose 22.1 percent to 7.7 trillion won.
The retailer said the on-year net income decline is blamed on one-off depreciation costs caused from previous acquisition deals and recall expenses at its affiliate SCK Company, the operator of Starbucks in Korea.
The coffee chain had recalled over 1 million giveaway picnic bags this year after toxic chemicals were found in the merchandise.
“We will focus on restoring Starbucks’ brand value by strengthening internal safety protocols and the inspection process of the chain’s merchandise,” it said.
The company’s discount store business showed modest performance.
Sales rose 4.2 percent, and operating profit inched up 1 percent from last year, buoyed by its specialty shop brands and big box stores.
Its e-commerce units — SSG.com and GMarket — also logged a combined operating loss of 38 billion won. The figure, however, narrowed from the previous quarter, it said.
Josun Hotels & Resorts Co., its accommodations business, turned to a profit this year with a sales increase of 57.7 percent from a rise in inbound travelers.
E-Mart, owned by Shinsegae Group, is a major discount retailer in South Korea. It also operates big-box stores E-Mart Traders and the emart24 convenience store chain.
Source: Yonhap News Agency