HiteJinro lifts third-quarter operating profit 6.2% despite weaker sales

HiteJinro said on Friday, November 13, that its third-quarter operating profit rose even as revenue fell, as South Korea’s largest liquor maker relied on cost cuts and tighter margin management to offset weaker sales in both soju and beer.

The company reported operating profit of 57.7 billion won, or about $43.3 million, up 6.2% from the same quarter a year earlier. Revenue fell 5.5% to 632.4 billion won, reflecting softer demand across its two main categories in a domestic alcohol market the company described as shrinking.

The biggest part of HiteJinro’s business, soju, posted sales of 367.5 billion won in the quarter, down 3.5% from a year earlier. Even with that decline, operating profit in the soju segment rose 7% to 45 billion won. Beer sales dropped more sharply, falling 9.7% to 204.4 billion won, while operating profit in that segment increased 8.4% to 11.7 billion won.

The improvement marked a turnaround from the same quarter a year earlier, when the company’s operating profit had fallen 22.5%. HiteJinro’s operating margin recovered to about 9.1% from 8.1%, showing that the company was able to preserve more profit from each unit of sales despite weaker revenue.

HiteJinro said the result reflected a profit-first strategy and continued cost reductions. The figures suggest the company is trying to protect earnings as consumer demand at home remains under pressure. That matters beyond one company’s quarterly report because South Korea’s drinks market is a major gauge for soju, beer and other alcohol producers facing slower sales and looking to defend margins through efficiency rather than volume growth.

The results also show the uneven conditions in the country’s beverage business. Sales declines in both soju and beer indicate that demand has not fully recovered, even for established brands with broad distribution. At the same time, the rise in profit in both segments points to tighter spending, product mix management or other internal measures that can soften the impact of weaker consumption.

HiteJinro said new products, including Terra Sparkling, should help it maintain its market leadership. That signals the company is still looking for growth drivers while keeping a close focus on profitability, a balance that is becoming more important for alcohol makers as competition intensifies and the domestic market offers less room for easy expansion.