South Korean cosmetics giant AmorePacific reported a 15 percent drop in first-quarter net profit as its business targeting Chinese travelers ran into trouble due to a diplomatic row over the installation of a US missile system.
AmorePacific said its net income stood at 223.5 billion won (197.8 million US dollars) in the January-March period, compared with 262.9 billion won a year ago. First-quarter operating profit fell 6.2 percent on-year to 316.8 billion won while sales rose 5.7 percent to 1.57 trillion won.
The company attributed the drop in its profit to a Chinese ban on tours to South Korea and a prolonged economic slump at home.
AmorePacific's first-quarter domestic sales were up 2.0 percent on-year to 1.14 trillion won but sales abroad soared 17 percent to 477 billion won. Its operating income from domestic sales including revenue from duty-free stores fell 13 percent on-year to 234 billion won.
China has restricted imports of South Korean products and K-pop culture in retaliation for Seoul's decision in July last year to deploy a US missile system called THAAD.
Last year, exports of South Korean cosmetics soared 41 percent on-year to a record high of 3.45 billion US dollars, including $1.24 billion to China, according to the Korea Customs Service.
This year, China has restricted imports of South Korean products and K-pop culture in retaliation for Seoul's decision in July last year to deploy a US missile system called THAAD. But exports of South Korean beauty products in the first quarter rose 32 percent to $935 million, according to the Korea Customs Service. China took up 26.7 percent or $337 million as South Korean beauty products are still popular among Chinese consumers.
Lim Chang-won = email@example.com
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