South Korean cosmetics giant LG H&H Co. on Thursday reported its second-quarter net profit sank more than 23 percent from a year earlier due to weak cosmetics sales in China.

Net profit of the April-June period was 96.4 billion won (US$75.4 million), down 23.5 percent from a year ago, the company said in a regulatory filing.

The operating profit plunged 27.1 percent to 157.8 billion won, and sales dipped 3 percent to 1.8 trillion won.

The earnings fell short of market expectations. The average estimate of net profit by analysts stood at 107.6 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The sharp decrease in net profit was driven by its sluggish flagship beauty business, which logged an 8.5 percent decrease in sales to 780.5 billion won over the three-month period.

Sales in China, a major market for South Korean cosmetics companies, fell by single digits, and sales at duty-free shops were down by double digits.

But LG H&H said its home care and daily beauty business and refreshment business saw their sales go up 0.5 percent and 3.2 percent on-year, respectively.

The refreshment business benefited from the popularity of Coca-Cola Zero and other energy drinks, the company added. LG H&H is the sole distributor of Coca-Cola products in South Korea.

Shares of LG H&H rose 9.76 percent to 455,500 won on the main Seoul bourse, far outperforming the KOSPI's 0.44 percent gain.

Source: Yonhap News Agency