AmorePacific's Q2 net drops sharply amid THAAD row

AmorePacific Corp., the country's top cosmetics maker, said Wednesday its second-quarter net profit plunged 59.8 percent from a year earlier, due largely to a protracted slump in the domestic market amid a sharp decline in Chinese tourists.

Its net income came to 77.4 billion won ($69.2 million) in the April-June period, compared with 193 billion won the previous year, the company said in a regulatory filing.

The operating profit for the cited period also fell 57.8 percent on-year to 102 billion won, with sales plunging 16.5 percent to 1.2 trillion won from a year earlier. 

The company cited a drawn-out slump in its domestic sales, along with a decrease in inbound tourists from China, which followed the Beijing government's ban on sales of Korea-bound package trips beginning mid-March, as the main factors weighing on the profit.

The number of Chinese tourists in South Korea more than halved in June, marking a decline for four straight months amid a diplomatic row between the two countries over the deployment of the US Terminal High Altitude Area Defense here.

AmorePacific's operating income from domestic sales, which include the revenue from duty-free stores, nosedived 32.3 percent on-year in the first half of 2017 to 316 billion won, the company said. Its sales during the period also dropped 10.1 percent to 1.91 trillion won.

Its operating income from overseas sales also dropped 16 percent in the first six months of this year to 107.9 billion won, though it logged a 7.3 percent rise in overseas revenue at 885.5 billion won on the back of strong demand in the Asian markets, including Thailand, Malaysia and Indonesia.

The combined operating income of AmorePacific Group, which includes its smaller brands like Innisfree, Etude and other household products, reached 130 billion won in the second quarter, down 57.9 percent from a year ago. The sales also dropped 17.8 percent on-year to 1.41 trillion won.

Shares of AmorePacific closed down 1.22 percent at 284,000 won on the main bourse Wednesday, with the broader Korea Composite Stock Price Index shedding 0.22 percent. The earnings results were released after the market opened. (Yonhap)