[Click eStock] "Cosmax NBT Expected to Turn Operating Profit Positive in Q2... Reevaluation Needed"

[Asia Economy Reporter Kum Boryeong] An analysis has emerged that Cosmax NBT's operating profit in the second quarter will turn positive.

According to Hana Financial Investment on the 5th, Cosmax NBT's consolidated performance for the second quarter is estimated at sales of 61.6 billion KRW and an operating profit of 600 million KRW. Compared to the previous year, sales increased by 23.7%, and operating profit turned positive.

Kim Doohyun, a researcher at Hana Financial Investment, explained, "Although direct sales were impacted by the novel coronavirus disease (COVID-19), growth in home shopping and online channels compensated for this, and quarterly growth is expected to continue starting from the first quarter of this year. The U.S. subsidiary, which had the largest deficit, is also expected to increase sales by about 53.6% year-on-year due to securing new clients and expanding volumes with existing customers, and a reduction in losses is anticipated due to increased operating rates."

Kim's analysis points out that this year is a notable turning point for performance. Hana Financial Investment forecasts Cosmax NBT's performance this year at sales of 263.3 billion KRW and an operating profit of 7.3 billion KRW. Sales are expected to increase by 35.5% compared to the previous year, with operating profit turning positive.

Researcher Kim said, "With an increase in shipments to China, where the proportion of premium products is high, and a reduction in cost burdens at the U.S. subsidiary due to increased delivery volumes, both external growth and profitability improvement are expected simultaneously. Despite the growth of the health functional food market, Cosmax NBT has been overlooked due to deteriorated consolidated performance caused by losses at overseas subsidiaries. Now, with the reduction of losses at overseas subsidiaries and securing new sales drivers through the acquisition of individual recognition raw materials, it is time to re-evaluate Cosmax NBT."