Shinsegae Duty Free, Korea’s third-largest travel retailer by sales, posted net sales of KRW 997 billion (USd 781 million) in Q4 2022, a rise of 21.1 percent year-on-year, strong airport sales, from a low base in Q4 2021, buoyed the figures.
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Operating profit of KRW 26 billion (USD 20.4 million) was higher than market expectations and more than double last year’s figure of KRW 12 billion.
For the full year, Shinsegae Duty Free sales hit KRW 3,439 billion (USD 2.69 billion), up by 29.3 percent on a year earlier, though operating profit fell from KRW 78 billion (USD 61.1 million) a year ago to KRW 5 billion (USD 3.9 billion).
Increased airport sales were a key contributor to volumes, with sales in the channel leaping by 364 percent over the year compared to Covid-hit 2021. Downtown duty free sales climbed by 7 percent.
In a note, BofA Global Research said: “Q4 duty free revenue was stronger, up 11 percent YoY from a sharp recovery at the airport business. Profitability was in-line, adjusting for FX related loss and KRW 16 billion duty free licence fee, part of which should be reversed and added to Q1 23E operating profit. On Q1-to-date operation that is likely to be affected by the cutback on the reseller business, the company guided around 30 percent month-on-month decline in revenue in Jan, but that the industry is likely to balance top line growth and a normalised commission rate from Q2.”
This week, South Korea also revealed it has lifted the suspension of short-term visas for travellers from China, imposed in January. The Korean government cited an improved Covid-19 situation in China as a key reason.
According to the Ministry of Health and Welfare, other travel requirements remain in place for visitors arriving from China, including a pre-boarding and post-entry PCR test.
China has welcomed this decision with Foreign Ministry spokeswoman Mao Ning calling the move “the right step towards reducing obstacles hindering cross-border travel between the two countries.”
She also said that Beijing will actively consider lifting the countermeasure it imposed against South Korean visitors early this month. During a press conference on Friday, she said: “China will consider resuming the issuance of short-term visas for the citizens of the Republic of Korea when appropriate. It is hoped that the Republic of Korea will work with China to do more to facilitate normal people-to-people exchange between the two countries.”
In early January, Seoul suspended issuing travel visas for Chinese travellers, citing the resurgence of Covid-19 cases in the country. This followed China’s decision to ease restrictions on movement from 8 January.
As a countermeasure, Beijing instructed its embassy and consulates to halt the issuance of visas for all visitors from South Korea.
Source: Moodie Davitt Report