Emart swings to loss in Q2 on increased expenses, tax

Korean discount retailer Emart said Thursday it swung to a net loss in the second quarter of this year on increased expenses and property taxes.

On a consolidated basis for the three months ending in June, net loss amounted to 63.1 billion won ($48.5 million), compared with a profit of 483 billion won a year earlier, the company said in a regulatory filing.

Operating loss also reached 12.3 billion won, though it was better than market consensus. Sales were at 7.14 trillion won, up 21.9 percent from a year earlier.

Emart attributed the second-quarter net loss to costs stemming from amortization of its holdings in the Starbucks coffee chain and the Gmarket Global e-commerce site. A rise in property taxes and other increased expenses were also cited as reasons.

By sector, Emart discount stores posted an operating loss of 19.1 billion won, compared with a profit of 5.8 billion won a year earlier.
Its online businesses, including SSG.com, W Concept and Gmarket, showed sales growth despite operating losses. Of them, operating losses at SSG.com and Gmarket came in at 40.5 billion won and 18.2 billion won, respectively.

The retailer said it is pushing for 29.7 trillion won in sales this year by expanding investment in logistics and renovation of its offline stores.

Emart, owned by Shinsegae Group, is the No. 1 discount retailer in Korea in terms of the number of stores. It also operates the big-box store Emart Traders, and the Emart 24 convenience store chain.

Yonhap