Operating Profit Up 29% Year-on-Year
Impact of Increased Overseas Exports and Strong Shipments
Subsidiary HK Innoen Also Shows Strong Performance
KOLMAR Korea set a new record for the highest performance in the second quarter ever, driven by expanded overseas exports, strong sales of Sun products, and solid results from its subsidiaries.
KOLMAR Korea announced on the 9th that its consolidated operating profit for the second quarter of this year was tentatively estimated at 71.741 billion KRW, a 28.9% increase compared to the same period last year. During the same period, sales grew by 10.1% to 660.271 billion KRW, and net profit increased by 5.9% to 45.165 billion KRW.
KOLMAR Korea recorded an 'earnings surprise' with an operating profit about 10% higher than securities firms' forecasts. Securities firms had projected KOLMAR Korea’s second-quarter sales at 664.3 billion KRW and operating profit at 64.2 billion KRW. The company’s second-quarter operating profit was 11.7% higher than the forecast, and sales were in line with expectations.
A KOLMAR Korea representative explained, "The expansion of overseas export volumes of indie brands and strong performance of Sun products drove overall growth," adding, "The strong results of subsidiaries HK inno.N and Yeonwoo also had an impact."
Looking at performance by business segment, KOLMAR Korea’s standalone operating profit rose 28% from the same period last year to 44.2 billion KRW, and sales grew 17% to 297 billion KRW. Examining sales proportions by product, Sun products such as sunscreen accounted for 33%. KOLMAR Korea expects its market share in the domestic Sun product market to rise 5 percentage points from last year to 75% this year. The company emphasized that export demand for Sun products remains high regardless of peak or off-season periods.
Improved productivity also contributed to the results. KOLMAR Korea’s production capacity (CAPA) in the second quarter increased by 15% compared to the same period last year. With the expansion of the Sejong Plant 1 scheduled for the fourth quarter, further increases in production capacity are expected, according to KOLMAR Korea.
Subsidiary HK inno.N also improved its performance as all prescription drug (ETC) categories, including the gastroesophageal reflux disease new drug K-CAB, cardiovascular, diabetes, and infusion products, grew. HK inno.N’s second-quarter sales were 219.3 billion KRW, and operating profit was 24.3 billion KRW, representing increases of 7% and 59%, respectively, compared to the same period last year.
Another subsidiary, Yeonwoo, posted second-quarter sales of 74 billion KRW and operating profit of 1.2 billion KRW. Compared to the same period last year, sales increased by 17%, while operating profit remained at the same level. Yeonwoo’s sales grew due to increased transactions with indie brands. Domestic sales accounted for 57% of Yeonwoo’s total sales. Yeonwoo expects improved profitability in the second half of the year through securing molds for indie brands and improving production facilities.
However, Musok Kolmar, the local subsidiary in China, saw a slight decline in performance due to the economic slowdown in China. Musok Kolmar’s second-quarter sales decreased by 7% year-on-year to 52.7 billion KRW, and operating profit fell by 27% to 6.7 billion KRW. Nevertheless, the company increased local brand customers centered on Sun products in China. The total number of Sun product customers at Musok Kolmar rose 51% compared to the same period last year.
In the North American market, the operating loss was reduced. Although research and development (R&D) costs increased in the North American market, the operating rate rose as renewal products for major U.S. original design manufacturing (ODM) customers were produced. U.S. Kolmar’s sales and operating loss were 13.4 billion KRW and 1.3 billion KRW, respectively. Sales increased by 61.1% year-on-year, and the deficit was reduced by 1.2 billion KRW. However, sales in Canada were 12.6 billion KRW, down 11.5% from the same period last year. Operating profit also turned negative, resulting in an operating loss of 900 million KRW.
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