이 기사는 2021년 04월 05일 08:09 thebell 에 표출된 기사입니다.

South Korea’s chicken conglomerate Harim Group is trying to help its struggling U.S. business stay afloat by continuing to pump in capital, but the unit’s financial performance is only getting worse.

Harim USA, formerly known Allen Family Foods, was established in 2011 when the Harim Group purchased the then bankrupt U.S. poultry company for roughly $120 million with ambitions to expand across geographies. However, its financial performance has not improved for the past decade, with the company having swung to a full-year loss in 2018 and its net losses continuing to widen since then.

Apart from financial problems, the Delaware-based company also suffered issues related to employee misconduct. To strengthen its supervision, the conglomerate implemented a corporate restructuring last year to place the U.S. business directly under its holding company, Harim Holdings.

Over the past year, Harim Holdings has poured more than 75 billion won ($66.5 million) into Harim USA, with other listed affiliates under the conglomerates, including NS Shopping and Farmsco, together injecting nearly 40 billion won into the company. The holding company now owns 60.2% of Harim USA – a large increase from 43% as of early last year – after a series of capital injections.

Despite efforts by Harim Holdings to support the company, Harim USA’s revenue decreased to 250.7 billion won in 2020 and its net loss more than tripled to 137.1 billion won year-on-year. As a result, its total shareholders’ equity turned negative at minus 2.4 billion won.



Harim Holdings recorded revenue of 15.2 billion won last year, up 15.4% from a year ago, and its operating income rose more than eleven-fold to 2.5 billion won. However, a 44.8 billion won impairment related to Harim USA’s poor performance was recognized on the holding company’s income statement, resulting in a net loss of 39.4 billion won versus a 1.47 billion won net income a year earlier.

Harim Holdings is sticking to its plan to keep supporting Harim USA because it sees the U.S. as a key market for future growth.

“The sale of the U.S. unit is not an option at all,” said an official at Harim. “While it’s true that plenty of cash has been put into the company, we still believe the U.S. market will drive our future growth. We expect our financial performance to improve as we recover from the Covid-19 pandemic and other factors.” (Reporting by Eun-jin Choi)