Cha Biotech Opens Era of 500 Billion KRW Annual Sales
Sales Increased by 2.9% Last Year to 502.8 Billion KRW
Second Quarter Expected to Record Highest Sales Reflecting US Hospital Subsidies
[Asia Economy Reporter Choi Daeyeol] ChabioTech, a company specializing in cell therapy development, has entered the 500 billion KRW annual sales era. Although operating losses occurred due to partial non-reflection of sales from its subsidiary's general hospitals in the US, it is expected to improve as these will be recorded in the first half of this year.
According to the company on the 27th, consolidated financial statements show that last year's sales amounted to 502.8 billion KRW, an increase of 2.9% compared to the previous year. Operating loss turned to 9 billion KRW in deficit. Net profit for the period increased by about 19% to approximately 42.9 billion KRW. The operating loss was due to delays in the calculation process of the US government subsidy (QAF) payments.
According to the company, QAF is a healthcare service program provided by the US federal government targeting low-income patients, which grants subsidies to hospitals in California. Previously, in 2017, the US federal government delayed settlements, causing the first to third quarters of that year not to be reflected and applied retroactively in the fourth quarter. The QAF sales retroactively applied in the fourth quarter at that time amounted to about 43 million USD (approximately 50 billion KRW).
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According to the California state government, the 6th QAF budget is expected to increase by about 6.3% compared to the 5th. The company anticipates that if the unreflected portions from the third and fourth quarters of last year and the first quarter of this year are temporarily reflected in the second quarter, it will set a record for the highest quarterly sales. An industry insider said, "It is expected that the company will be removed from the investment caution list as a result of improvements in internal accounting management systems," adding, "Once removed from the caution list, institutional investors will be able to purchase shares on the market, and if included in the KOSDAQ 150 index in June, index-tracking funds are expected to flow in."
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