Softcen Sees Increased ICT Orders, Expects Improved Performance in Second Half

Softcen announced on August 22 that it expects improved performance in the second half of this year, driven by increased orders in the information and communication technology (ICT) sector, which will lead to higher sales.

Softcen provides value-added services for the three major mobile carriers in China and, in Korea, operates ICT businesses including the construction, consulting, and maintenance of various IT infrastructures, as well as manufacturing X-ray inspection equipment for secondary batteries.

In the first half of this year, Softcen’s consolidated sales amounted to 18.9 billion KRW, a 31.2% decrease from the previous year’s 27.4 billion KRW, and the company recorded both operating and net losses. This was due to delays in exporting high-margin new products-specifically, core equipment for ultrathin solar glass and building-integrated photovoltaics (BIPV) modules-to China, as well as a temporary increase in cost recognition.

On a separate basis, first-half sales were 2.1 billion KRW, down 81.8% from 11.7 billion KRW in the previous year. In particular, second-quarter sales were only 150 million KRW, falling below 300 million KRW, which led to the company being included in the Korea Exchange’s substantive review for listing eligibility on August 14. Softcen clarified that this was a temporary error in sales recognition and corrected the actual second-quarter sales to 1.18 billion KRW, subsequently resubmitting its first quarter and half-year reports, which resulted in its removal from the listing eligibility review list.

A company representative said, “In the first half, we secured a total of 3.5 billion KRW in ICT maintenance contracts, of which 2 billion KRW was recognized as sales. Currently, about 6.8 billion KRW in new orders are underway for the third quarter, with third-quarter sales expected to reach approximately 4.9 billion KRW and fourth-quarter sales about 3.3 billion KRW.” The representative added that annual ICT sales are projected to exceed 10 billion KRW this year, which is similar to last year’s level.

The representative also stated, “For X-ray inspection equipment manufacturing, we have completed product manufacturing and delivered it to the client, but since the client’s final inspection (SAT) has not been completed, we have not yet recognized the sales and have recorded a balance of 3.5 billion KRW as advance payments. We expect the SAT to be completed during the third quarter, at which point it will be recognized as sales.”

Softcen is anticipating a rebound in performance starting in the second half of this year. The company representative said, “This is unrelated to any business suspension. The decrease in first-half sales was a temporary phenomenon caused by the deferral of sales recognition for already secured orders to the third quarter. Since sales have been recovering since July, we expect significant improvement in performance in the second half.”