RF Tech "Head Office Business and Subsidiary Sales Recover to Pre-COVID Levels"

[Asia Economy Reporter Hyunseok Yoo] RF Tech announced on the 16th through a public disclosure that it recorded sales of 78 billion KRW and an operating profit of 3.9 billion KRW in the third quarter. The quarterly performance is said to have successfully returned to an improving trend despite the spread of the novel coronavirus infection (COVID-19). Compared to the previous quarter, sales increased by 32% and operating profit by 55%. Compared to the same period last year, they decreased by 15% and 42%, respectively.

Despite delays in 5G infrastructure construction in major countries such as the United States and Japan due to the spread of COVID-19, RF Tech recorded an operating profit of around 5%. This is the result of expanded sales in the mobile components business with cost competitiveness and improved performance of its subsidiary, RF Bio.

Sales in the mobile components business in the third quarter increased by 36% from the previous quarter to 71 billion KRW. The medical aesthetic business promoted by the subsidiary RF Bio recorded quarterly sales of 2.2 billion KRW, a 108% increase compared to the previous quarter.

An RF Tech official said, “The third-quarter performance is positive in that the core business of mobile components and the aesthetic business of the subsidiary RF Bio have recovered to levels surpassing those before the COVID-19 crisis,” adding, “The core growth engine, the '5G base station antenna module' business, has had limited contribution to performance due to delays in infrastructure construction caused by the spread of COVID-19, but it is highly likely to become a major growth driver starting next year.”

He continued, “Net profit recorded a loss due to a derivative valuation loss of 17.1 billion KRW from convertible bonds, which is an accounting valuation loss without cash outflow caused by the stock price increase compared to the conversion price of the convertible bonds,” and added, “Convertible bonds with a repricing clause under accounting standards are interpreted as an increase in financial liabilities payable to bondholders when the stock price rises, so they are treated as derivative valuation losses, which is a one-time item that does not affect cash flow or capital.”