TheBorn Korea (475560) posted an operating loss in the first quarter as investor sentiment toward the restaurant franchise operator remained frozen. CEO Paik Jong-won, the company's high-profile founder, has vowed to strengthen TheBorn Korea's competitiveness through aggressive investment.
According to the Korea Exchange on Tuesday, TheBorn Korea shares closed at 19,150 won, down 90 won, or 0.47%, from the previous trading day. The stock outperformed the broader market as the KOSPI fell more than 6%, but the decline marked TheBorn Korea's 10th consecutive session of losses.
TheBorn Korea's IPO price was 34,000 won per share. The company raised 102 billion won through its initial public offering. The most recent date the stock traded above its IPO price was December 23, 2024, when it closed at 34,200 won. The shares have remained below the IPO price for about a year and a half.
First-quarter earnings were also weak. According to the Financial Supervisory Service's electronic disclosure system, TheBorn Korea posted consolidated revenue of 79.6 billion won and an operating loss of 4.2 billion won in the first quarter. The company has recorded operating losses for four consecutive quarters, from the second quarter of last year — when it began full-scale execution of its co-prosperity support payments — through the first quarter of this year. Quarterly operating losses since the second quarter of last year were 22.5 billion won, 4.4 billion won, 3 billion won, and 4.2 billion won, respectively.
TheBorn Korea said the results reflect "the continuation of brand-by-brand co-prosperity support policies to overcome the severe downturn in the restaurant industry, as well as increased investment for a medium- to long-term transformation into a comprehensive food company." TheBorn Korea's headquarters spent about 43.5 billion won in co-prosperity support last year to boost sales at franchisees of its various brands, and franchisees used the funds to run discount promotions and respond to weak consumption and rising costs.
Paik said in March that he would make up for a year marked by complaints and accusations by focusing on the global market. At the company's 32nd annual general meeting of shareholders, he said, "Last year, we lost a year as we faced numerous unreasonable complaints and accusations from certain groups. Now that nearly all suspicions have been cleared, we can finally begin the corporate activities we were unable to pursue last year."
"Although a year was lost, I will make this year the inaugural year for our leap into a global comprehensive food company," Paik added. "We will focus on expanding into overseas markets this year. Based on our global B2B sauce business, we are currently engaged in business exchanges with local companies in the Americas, Southeast Asia, and Europe, and we plan to introduce one or two of our core brands to new overseas locations this year."
He continued, "We will pursue aggressive mergers and acquisitions. We are reviewing M&A opportunities from multiple angles to create synergies with TheBorn Korea's businesses." He emphasized that the company is keeping various options open for global expansion, including manufacturers with sauce production facilities, restaurant operators, and food-tech companies. Domestically, he said the company will pursue new businesses such as a B2B kitchen solutions platform, a catering business, and diversification of distribution products.
