2Q Sales and Operating Profit Increase by 13.4% and 64.5% Respectively
Record Quarterly Performance
Growth in Prescription Drugs and Health Supplements
First Mid-Term Dividend Decision Since Establishment
Huons recorded its highest quarterly performance ever.
Exterior view of Huons Group's new office building in Pangyo, Seongnam-si, Gyeonggi Province. [Photo by Huons]
Huons announced on the 8th that its consolidated financial statements for the second quarter of this year showed sales of 140.7 billion KRW and operating profit of 17.9 billion KRW on a provisional basis. These figures represent increases of 13.4% and 64.5%, respectively, compared to the same period last year. Net profit for the same period grew by 98.2% to 14.9 billion KRW.
This is Huons' largest quarterly performance to date. The company explained that focusing on securing profitability as the top priority and concentrating efforts on expanding overseas exports and strengthening internal management were key factors.
The second-quarter performance was driven by growth in the prescription drug business segment. Prescription drugs recorded sales of 66.3 billion KRW, a 32% increase compared to the previous year. Prescription sales across anesthetics, cardiovascular drugs, antibiotics, and anti-inflammatory analgesics showed steady growth. In particular, exports of anesthetics to the U.S. reached 7.1 billion KRW, a 108% surge compared to the same period last year. Four products, including lidocaine topical anesthetics, which received approval for drug product listings (ANDA) from the U.S. Food and Drug Administration (FDA), recorded sales of 12.7 billion KRW in the first half of the year. This figure surpassed last year's annual sales of 12.3 billion KRW.
Sales in the beauty and well-being business segment reached 49.4 billion KRW, growing 9% compared to the same period last year. In particular, the health functional food business achieved its highest performance with sales of 20 billion KRW, driven by the launch of new products 'Menolacto Premium' and 'Jeonlipseon Sagunja.' The contract manufacturing organization (CMO) business also maintained solid performance with sales of 16.8 billion KRW.
Operating profit for the second quarter was 17.9 billion KRW, with an operating profit margin of 12.7%. Huons explained that profitability significantly increased thanks to expanded overseas pharmaceutical exports, growth in online sales of health functional foods, and a turnaround to profitability by its subsidiary. Huons Foodience, a subsidiary, turned profitable in the second quarter with sales of 10.6 billion KRW as factory utilization rates rose.
Huons plans to continue sustainable growth in the second half of the year. To strengthen competitiveness of injectable exports in the North American region, the company expanded its lineup of export pharmaceuticals by acquiring additional U.S. FDA ANDA approval for 2% lidocaine (vial) and exporting 1% lidocaine (vial, ampoule) to Canada. Additionally, it is diversifying sales channels through the launch of new health functional food products using individually recognized raw materials and expanding online sales.
The company is also accelerating the development of new drugs for dry eye treatment. In June, it submitted a Phase 1 clinical trial plan (IND) for 'HUC-1 394 (FPR2 Selective peptide ligand),' and is conducting Phase 3 clinical trials for 'HUC2-007,' a combined eye drop that minimizes side effects by combining cyclosporine and trehalose.
Song Soo-young, CEO of Huons, stated, "Despite the difficult domestic and international economic conditions this year, Huons was able to record strong performance in the second quarter based on its global export expansion strategy. Going forward, we will continue to focus on innovation and sound management, and through proactive responses that turn crises into opportunities, we will strive to lead global market expansion and sustainable growth."
Furthermore, Huons decided to pay an interim dividend for the first time since its founding. The interim dividend is 300 KRW per share and is scheduled to be paid on the 25th. The company announced a mid- to long-term shareholder return policy last February, stating its intention to increase dividends per share by a minimum of 0% and up to 30% compared to the previous fiscal year.
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