Orion's 1Q Operating Profit Rises 26.2% YoY to 125.1 Billion Won on Improved Profitability in China

Sales of 748.4 Billion KRW... 12.7% Increase YoY
Chinese Subsidiary Operating Profit Rises 41.5%, Driving Overall Performance

Orion achieved strong performance in the first quarter of this year, driven by its overseas business. Despite the continued rise in raw material prices, efforts such as diversifying raw material supply sources and global integrated purchasing, focusing on efficiency and profitability management, proved effective.

Orion announced on the 16th through a public disclosure that its consolidated operating profit for the first quarter of this year reached 125.1 billion KRW, a 26.2% increase compared to the same period last year. Sales grew by 12.7% to 748.4 billion KRW.

By corporation, the Korean corporation recorded sales of 271.6 billion KRW, up 9.5%, and operating profit of 43.8 billion KRW, up 17.1%. Sales and operating profit grew together as supply was expanded through the pie and biscuit lines expanded last year, and cost reduction efforts continued.

The Chinese corporation achieved sales of 306.4 billion KRW, a 16.0% increase, and operating profit of 54.2 billion KRW, a 41.5% increase. Sales grew due to the effect of the largest holiday, ‘Chunjeol’ (Lunar New Year), and operating profit increased significantly as the company switched to an indirect sales system to improve profitability.

The Vietnamese corporation recorded sales of 118.2 billion KRW, up 12.3%, by increasing sales of ‘Tet’ holiday gifts and aggressively operating in discount stores and convenience store channels. Operating profit grew 18.9% to 19.5 billion KRW through reduction of unnecessary market expenses.

The Russian corporation saw its new Choco Pie production line fully operational and expanded the entry of new products such as jelly and Fresh Pie, resulting in sales and operating profit growth of 25% and 13%, respectively, in local ruble terms. However, due to a 16% depreciation of the local currency, sales grew by 4.8% to 50.5 billion KRW, and operating profit declined by 6.0% to 7.8 billion KRW.

Based on confidence in both external growth and profitability improvement, Orion is actively pursuing investment and enhancing shareholder value. In April, it announced a dividend policy to increase the dividend payout ratio to at least 20% of consolidated net income for the next three years as part of its shareholder return policy. According to market forecasts, the total dividend amount this year is expected to increase by more than 70%, from about 50 billion KRW in 2023 to approximately 85 billion KRW.

RigaChem Bioscience, an affiliate acquired in March this year, received a $100 million milestone payment in January for Janssen technology transfer, recording a pre-tax profit of 9.7 billion KRW in the first quarter. Additionally, with a rights offering on March 29, the market capitalization increased from 1.7772 trillion KRW to 2.4465 trillion KRW, securing financial stability and improving cash flow, enabling acceleration of new drug research and development and clinical progress.

Showbox, a subsidiary of the holding company Orion Holdings, contributed to the group’s strong performance by recording an operating profit of 20 billion KRW in the first quarter, boosted by the success of the movie ‘Pamyoh’, which attracted 11.9 million viewers.

An Orion official stated, “We will continue sustainable growth through strengthening product competitiveness and market expansion, while focusing on securing future growth engines based on solid cash flow.”