E-Mart posts first-ever loss ; restructuring lures
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Korean discount chain operator E-Mart has posted its first-ever net loss, amid growing competition from online shopping rivals and e-commerce giants.
The company’s quarterly results showed a net loss of KRW26.6 billion (US$24.7 million) between April and June, its first negative result since it was spun off from Shinsegae Group in 2011. The loss stands in comparison to a net profit of KRW94.8 billion ($77.7 million) during the same period last year.
The company says it plans to raise 1 trillion won (US$820 million) by selling assets and will buy back stocks worth some 100 billion won to boost shareholder value.
E-Mart says it expects its losses will to continue into the next financial period.
“Online archrivals, such as Coupang Inc and other major e-commerce operators are forecast to expand their food category later in the year,” said Hana Financial Investment expert Park Jong-dae, “which could further weigh down E-Mart.”
Questions & Answers
Q.When did E-Mart record this net loss, and how does it compare to the previous year?
When did E-Mart record this net loss, and how does it compare to the previous year?
E-Mart reported a net loss of KRW26.6 billion (US$24.7 million) between April and June. This contrasts with a net profit of KRW94.8 billion ($77.7 million) in the same period last year.
Q.What measures does E-Mart plan to take to address its financial situation and boost shareholder value?
What measures does E-Mart plan to take to address its financial situation and boost shareholder value?
E-Mart plans to raise 1 trillion won (US$820 million) by selling assets. Also, it will buy back stocks worth some 100 billion won to increase shareholder value.
Q.What is causing E-Mart's current losses, and what is the outlook for the near future?
What is causing E-Mart's current losses, and what is the outlook for the near future?
The losses are due to growing competition from online shopping rivals and e-commerce giants. E-Mart expects these losses to continue into the next financial period, partly because online archrivals are forecast to expand their food category.
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