"Growth Momentum Continues" Orion Reports 3Q Operating Profit of 121.7 Billion KRW, Up 6.6% YoY (Comprehensive)

Q3 Sales of 741.1 Billion KRW... 18.5% Increase YoY
New Product Launches and Active Local Market Response Strategy
Growth to Continue in Q4 with New Product Launches and Targeting Lunar New Year Peak Season in China and Vietnam

[Asia Economy Reporter Eunmo Koo] Despite the worsening external business environment due to global inflation and economic recession, Orion continued its growth trend in the third quarter by increasing both sales and operating profit through sales strategies that actively respond to new product launches and local market conditions.

Orion announced on the 14th through a public disclosure that its consolidated operating profit for the third quarter of this year reached 121.7 billion KRW, a 6.6% increase compared to the same period last year. Sales during the same period grew by 18.5% to 741.1 billion KRW.

The Korean subsidiary recorded sales of 236 billion KRW, up 17.6%, and operating profit of 33.2 billion KRW, up 13.2%. All categories continued to grow, including the ‘Dr.You’ brand, which saw a 25% increase in sales compared to the previous year. Although the manufacturing cost ratio surged nearly 6 percentage points year-on-year due to rising raw material and energy costs, operating profit also grew thanks to an approximately 3 billion KRW increase in royalty income from overseas subsidiaries’ sales growth and additional profits from expanded export volumes.

The company plans to focus its capabilities on defending profitability in the fourth quarter, as pressure on manufacturing costs is expected to intensify due to continued increases in prices of key raw materials such as potatoes and oils, as well as energy costs. Additionally, Orion will strengthen market dominance by continuously launching new products in biscuits, snacks, jelly, and Market O Nature, while also raising brand awareness in the beverage business based on the differentiated product attributes of ‘Dr.You Jeju Lava Water.’

The Chinese subsidiary posted sales of 335.7 billion KRW, a 5.0% increase, and operating profit of 59.6 billion KRW, a 14.3% decrease. Focusing on strengthening sales capabilities, the company actively sought new clients and continued sales growth centered on snacks and jelly. Although operating profit declined in the third quarter due to rising manufacturing and logistics costs, it grew 12.0% cumulatively for the first three quarters.

In the fourth quarter, ahead of the local ‘Chunjeol’ peak season, which corresponds to Korea’s Lunar New Year, Orion plans to aggressively target holiday demand by releasing gift sets reflecting local culture earlier than usual. The company will continue growth centered on competitively priced snacks while maintaining efforts to strengthen sales capabilities.

The Vietnamese subsidiary achieved sales of 113 billion KRW, a 44.0% increase, and operating profit of 21 billion KRW, a 65.8% increase. The launch of new products across all categories including pies, snacks, biscuits, and jelly, combined with differentiated sales capabilities, created synergy and sustained high growth. Despite rising key raw material prices, a virtuous cycle system was established where profits maximize as sales increase, based on cost structure efficiency.

In the fourth quarter, Orion plans to secure shelf space by launching gift packages for ‘Tet,’ Vietnam’s largest holiday, and focus on the peak season by promoting B2B sales targeting bulk purchase demand. To strengthen leadership in the meal replacement market, the company will also introduce a new category of layer cake products as a new growth engine.

The Russian subsidiary recorded sales of 62.3 billion KRW, a 103.4% increase, and operating profit of 10.6 billion KRW, a 181.5% increase. Since the full operation of the new Tver factory, production of the core pie category has significantly increased, reaching a 138% operating rate in September, while the biscuit lineup has also diversified, maintaining strong growth. In the fourth quarter, Orion plans to expand and relocate production lines for pies and biscuits at the new factory to increase product supply, while also expanding the number of dealers and clients.

An Orion official stated, “Despite the difficult business environment caused by global inflation, we focused our capabilities on active market expansion and profitability defense based on product strength,” adding, “In the fourth quarter, we will continue ‘healthy growth’ by launching differentiated new products and thoroughly preparing for the Lunar New Year peak seasons in China and Vietnam.”

This content was produced with the assistance of AI translation services.