Seojin System Reports Quarterly Sales of 192.1 Billion KRW... "Record High Sales Again"

[Asia Economy Reporter Jang Hyowon] Seojin System, a supplier of advanced industrial equipment and components (CEO Jeon Donggyu), announced on the 16th that it recorded sales of 192.1 billion KRW and an operating loss of 2.3 billion KRW in the second quarter of this year. The cumulative sales for the first half reached 332.2 billion KRW, marking a new record high for both the quarter and half-year periods.

Looking at the growth rates by business division for the half-year basis, the semiconductor components division posted sales of 52.9 billion KRW, showing a significant increase of over 65% compared to the same period last year. The ESS components division also grew by more than 26% year-on-year, with sales of approximately 73.7 billion KRW. Following these, the telecommunications equipment segment grew by 15%, and the mobile division by 14%, demonstrating balanced growth across all business units.

Despite the record-high sales, the operating loss and return to deficit were attributed to unresolved logistics cost issues, research and development expenses for the new electric vehicle battery pack business, and the payment of employee incentives in the first half, according to a Seojin System official. However, the official explained that these are temporary factors and will not affect the next quarter’s performance.

Seojin System continues to convert the backlog of demand caused by COVID-19 into sales, including ongoing orders for ESS component equipment for Fluence Energy in the first half. However, due to the nature of its business targeting the North American region, the surge in logistics costs has been a burden.

Nevertheless, Seojin System views the resulting decline in profit margins as a temporary phenomenon. Recently, global container shipping rates have sharply declined for eight consecutive weeks, which is a positive sign. Additionally, logistics improvements are also being observed locally in Vietnam, according to a Seojin System representative.

The continuous expansion of Seojin System’s quarterly and half-year sales and the balanced demand across all business divisions are also evaluated positively. Seojin System has a broad portfolio covering semiconductor and telecommunications equipment as well as automotive parts, batteries, ESS, and home appliances, and maintains a customer base composed of global companies.

The CEO of Seojin System stated, “We expect continued sales growth in various sectors, including semiconductor components, electric vehicle batteries, and home appliances,” adding, “We will focus more on improving profitability in the second half.”