The Born Korea, led by CEO Baek Jong-won, continued to experience operating losses in the third quarter of this year, although the deficit was slightly reduced compared to the same period last year.
According to the Financial Supervisory Service's electronic disclosure system on November 13, The Born Korea reported an operating loss of 3.7 billion won (approximately $2.8 million) for the third quarter, down from a loss of 4.4 billion won in the same period last year. Revenue for the quarter was 85 billion won, a decrease of 2.7% year-on-year. The net loss for the period was 4.3 billion won, widening from a loss of 2.7 billion won a year earlier.
Despite the decline in revenue, improvements in cost structure helped reduce the scale of operating losses. The cost of sales for the third quarter was 60 billion won, down 6.2% from 63.9 billion won in the same period last year. Consequently, the cost of sales ratio decreased from 73.1% to 70.5%.
However, selling and administrative expenses rose to 28.8 billion won, an increase of 3.4% compared to 27.8 billion won a year earlier. While transportation costs decreased from 7.1 billion won to 6.4 billion won, other expenses such as salaries, commissions, and depreciation increased, with depreciation costs rising from 600 million won to 1.2 billion won.
By business segment, all areas including franchise, distribution, and hotel operations reported losses. For the first three quarters of the year, the cumulative operating losses were 7.8 billion won for the franchise segment, 4.7 billion won for distribution, and 1 billion won for hotels.
The franchise segment also saw a decline in the number of stores for major brands. As of the end of September, the number of Hong Kong Banjum franchise stores decreased to 256, down by 21 from the end of last year, while Saemaul Sikdang dropped from 68 to 55 locations. Baek Boy Pizza also saw a reduction from 226 to 196 stores. In contrast, Baek Dabang increased its locations from 1,819 to 1,831.
For the first three quarters of the year, cumulative revenue totaled 247.8 billion won, a 9.0% decrease compared to the same period last year. The operating loss for this period was 13.5 billion won, narrowing from a loss of 20.6 billion won a year earlier. The cumulative net loss stood at 11 billion won.
* This article has been translated by AI.
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