Samyang beats Nongshim, Ottogi on earnings surprise with Buldak

Packets of Buldak instant noodles are stacked by a boat prepared by Samyang Roundsquare for a press event in central Copenhagen, Denmark, Aug. 8. Samyang Roundsquare, the parent company of Samyang Foods, prepared the event after the Danish government allowed Buldak products' reentry into the country's market after they were banned for being too spicy. Reuters-Yonhap 2nd-quarter exports account for over 78 percent of sales By Ko Dong-hwan Samyang Foods has shown an earnings surprise in the second quarter, registering an operating profit during the first half of this year and outrunning its two rivals, Nongshim and Ottogi, according to the food company Wednesday. The performance has hinted that Samyang, which has remained at No. 3 in the country's instant noodles market, might overtake the others with the growing overseas sales of its signature brand Buldak. Samyang, in the second quarter, registered 424.4 billion won ($311.8 million) in sales and an operating profit of 89.4 billion won. Exports accounted for 332.1 billion won of the sales. Based on the figures, the company registered 810.1 billion won in sales (621.1 billion won from overseas) and an operating profit of 169.5 billion won in the first half of this year. This was a 149.6 percent year-on-year increase from last year's 67.9 billion won operating profit. The first-half earnings this year are even higher than the entirety of 2023. Samyang's robust performance derived from the popularity of Buldak instant noodle products overseas. Most of the brand's overseas sales came from the United States. With its American subsidiary Samyang America, the company registered $71.4 million in sales in the country in the second quarter alone, a 125 percent jump compared to the previous year. Carbonara Buldak led sales in the country, according to the company. Europe has become another rising market for Samyang. About 19 percent of the company's exports headed to the region during the first six months of this year. The figure grew from 6 percent in 2019 to 15 percent last year. A packet of Ottogi's Jin Ramen is inside a shopping cart at a supermarket in Seoul, Sept. 15, 2022. Korea Times file To secure its market share in the region, the company has established its European subsidiary in North Holland, Netherlands. "Unlike the past when our exports were concentrated in Asia, the U.S. and Europe are now leading our exports," a Samyang official said. "And we've established our local bases in all those regions to increase our market shares there." Nongshim and Ottogi, the country's No. 1 and No. 2 instant noodle makers, respectively, have posted weaker earnings than Samyang during the same period. Nongshim registered 1.733 trillion won in sales and an operating profit of 105.1 billion won during the first half of this year. Sales jumped by 2.1 percent, and the operating profit dropped by 10.6 percent from last year. Ottogi registered 1.743 trillion won in sales and an operating profit of 134.8 billion won during the same period. Both figures increased respectively by 1.9 percent and 3.8 percent from last year. Both companies have been relying more on domestic sales than exports. Ottogi's exports last year registered 332.5 billion won, just 10 percent of its annual sales of 3.454 trillion won. The strategies ended up generating hefty costs for domestic advertising and other fixed fees as well as expenses for domestic operations. "While our instant noodle, home-meal-replacement and sauce products saw rising sales this year, the costs for advertising and other operating expenses increased as well, causing our second-quarter earnings to drop," an Ottogi official said. The company's second-quarter operating profit stood at 61.6 billion won, a 4.6 percent fall from last year. While Nongshim's signature brands, such as Shin Ramyun and Chapagetti, are popular in foreign countries, Ottogi doesn't have any such hit brands. Ottogi last week submitted its new English brand name, Otoki, to the Korean Intellectual Property Office to better promote itself to global consumers with an easier name to pronounce.