Seoul, Nov 11 — Emart, South Korea's largest discount retailer, said on Wednesday its third-quarter net profit plunged 99.8 per cent from a year earlier, weighed down by equity-method losses from affiliates.
Net profit for the three months that ended in September plunged to 600 million won (US$449,102) from 310.3 billion won in the same period last year, the company said in a regulatory filing, reports Yonhap news agency.
"Losses from affiliates, including Starbucks Coffee Korea (SCK) Co. and e-commerce platform SSG.COM, weighed on our quarterly earnings," a company spokesperson said over the phone.
SCK, operated by Emart, posted an operating loss of 45.3 billion won in the third quarter, partly due to the lingering fallout from a controversial promotion in May tied to the 1980 pro-democracy uprising in Gwangju, about 270 kilometers south of Seoul.
Emart owns a 67.5 percent stake in the coffee chain. On May 18, the anniversary of the Gwangju pro-democracy uprising, SCK launched an online promotion dubbed "Tank Day." The event was suspended within hours following widespread public criticism, as the term "tank" evoked memories of the military's violent crackdown on pro-democracy demonstrators during the uprising.
Shinsegae Group Chairman Chung Yong-jin apologized for the promotion, as did Starbucks' U.S. headquarters.
SCK also did not hold its annual summer e-Frequency promotion this year as part of efforts to restore customer trust, weighing on its quarterly earnings.
Operating profit for Emart fell 69.6 percent to 46.1 billion won in the third quarter from 151.4 billion won a year ago. Sales rose 1.2 percent to 7.49 trillion won from 7.4 trillion won.
For the first nine months of the year, the company swung to a net loss of 56.8 billion won from a net profit of 362.6 billion won a year earlier.
Operating profit fell 45.4 percent to 181.3 billion won from 332.4 billion won, while sales declined 0.6 percent to 21.5 trillion won from 21.66 trillion won.