Huons Achieves Record High Sales Last Year... Operating Profit Down 10%

Last Year's 4Q Revenue and Operating Profit Hit Record Highs
Operating Profit Declines Due to Advertising and Commission Costs

[Asia Economy Reporter Myunghwan Lee] Huons recorded its highest annual sales last year.

Huons announced on the 14th that its consolidated sales for last year were preliminarily estimated at 492.4 billion KRW, a 12.7% increase compared to the previous year. This is the highest annual sales ever recorded. However, operating profit for the same period decreased by 9.7% to 40.9 billion KRW, and net profit decreased by 18.1% to 25 billion KRW, showing a slight decline in profitability compared to the previous year.

Huons Second Factory. / Photo by Huons

On a quarterly basis, Huons achieved record-high sales and operating profit simultaneously in the fourth quarter of last year. The consolidated sales and operating profit for Huons in Q4 last year were 129.3 billion KRW and 16.2 billion KRW, respectively. These figures represent growth of 13.7% and 272.4% compared to the same period last year.

Looking at performance by sector, sales in the prescription drug business increased by 9.1% year-on-year to 213.8 billion KRW. The growth was driven by a 40% increase in anesthetic sales due to increased exports of injectable drugs mainly to the North American region. Among prescription drugs, exports to the U.S. of four products, including lidocaine topical anesthetics approved by the U.S. Food and Drug Administration (FDA) under Abbreviated New Drug Application (ANDA), recorded annual sales of approximately 12.3 billion KRW, a 69% increase compared to the previous year.

Sales in the beauty and well-being sector increased by 17.5% year-on-year to 175.6 billion KRW. The female menopause probiotic brand 'Eluvi Menolacto' alone generated sales of 38.5 billion KRW. The medical device business also recorded 16.5 billion KRW due to growth in 'Dexcom G6' and increased sales of diagnostic kits.

The Contract Manufacturing Organization (CMO) business also showed annual growth, achieving 65.7 billion KRW, a 12.9% increase compared to the previous year. Pharmaceutical contract manufacturing recorded 35.7 billion KRW, up 17% year-on-year, and ophthalmic solution contract manufacturing recorded 30.6 billion KRW, up 9%.

However, despite continuous sales growth, operating profit and net profit decreased compared to the previous year. Huons explained that this was largely due to increased advertising expenses and commission fees associated with the expansion of the health functional food business. Increased research and development (R&D) costs for expanding the pharmaceutical pipeline were also reflected.

Huons Foodience, a health functional food subsidiary, also recorded sales of 44.1 billion KRW and operating profit of 1.6 billion KRW last year due to increased exports and original equipment manufacturing (OEM) sales.

Huons is expanding its production lines to handle the increasing volume of injectable drug exports overseas. In November last year, it decided to invest 24.5 billion KRW in its Jecheon Plant 2 to expand vial and cartridge injectable drug production lines. Upon completion of the expansion, the new vial line will have a production capacity approximately 2.5 times greater than the existing line, capable of producing 73 million vials, and the new cartridge line will be equipped to produce 71 million cartridges. Huons expects the full operation of the injectable drug lines in the second half of next year.

Song Sooyoung, CEO of Huons, stated, "Since signing a supply contract for topical anesthetics with U.S. pharmaceutical distributor McKesson last year, the volume of injectable drug exports has increased significantly. We will continue to expand exports in overseas markets through diversified efforts such as building partnerships with overseas distributors and obtaining additional product approvals."

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