Newbotec, a company specializing in the manufacturing of water and sewage pipes, announced on the 29th that it achieved consolidated sales of 21.7 billion KRW, operating profit of 1.2 billion KRW, and net profit of 1.1 billion KRW in the first half of this year.
Although sales decreased by 13% compared to the same period last year, operating profit and net profit increased by 52% and 403%, respectively. Net profit also rose by 206% year-on-year in the first quarter and surged by 403% in the second quarter.
This was largely due to the main business of PVC pipes, influenced by the decline in raw material prices and the increase in selling prices continuing since 2022. The eco-friendly deicing agent recorded favorable performance due to increased sales after being registered as an excellent product by the Public Procurement Service and the decline in raw material prices. In fact, the cost of sales ratio decreased from 71.3% in the second quarter of 2023 to 64.2% in the second quarter of 2024.
A Newbotec official stated, “We were able to escape deficits through a profit-centered sales policy for PVC water and sewage pipes pursued since 2022, and we expect performance to improve further in the second half of the year.”
Additionally, Newbotec was in a partial capital erosion state with a capital impairment ratio of approximately 36.74% at the end of 2023, but on the 2nd of this month, it conducted a free capital reduction to cover losses with capital gains from the reduction and capital surplus, thereby overcoming capital erosion and improving its financial structure. As a result of the capital reduction, the company has established a system that allows dividends to shareholders upon future profit realization.
Simultaneously with the capital reduction, Newbotec is currently conducting a paid-in capital increase, planning to raise large-scale funds by allocating shares to existing shareholders and then offering unsubscribed shares to the general public.
The funds raised through the paid-in capital increase will be used to repay short-term debts and for operating capital, serving as a foundation for the company’s growth and ultimately laying the groundwork for transforming into a shareholder-friendly company.
Newbotec has registered a patent for a prefabricated storage tank structure. Its non-excavation total repair technology for sewage pipelines using a steam heat recovery system has been certified as a new environmental technology by the Ministry of Environment and the Korea Environmental Industry & Technology Institute, and has been selected as a priority purchase target for public institutions. It is expected to secure stable sales in the second half of the year.
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