City Labs "Positive Signs for Profit Business After Liquidity Improvement... Will Make This Year the First Year of Performance Turnaround"

City Labs, a KOSDAQ-listed company, dismissed concerns raised by some following the announcement of its plan for a free capital reduction, stating that it is merely a process of improving its financial health.

City Labs announced on the 12th that, as financial indicators showed overall improvement in the first quarter, the company is pursuing various business activities aiming for a performance turnaround this year. The company explained that its current liquidity ratio, a key asset soundness indicator, has increased from around 20% last year to 174%, and that most of the debt repayment using proceeds from the sale of Care Labs has been completed.

Based on overall efforts to improve its financial structure, the company was removed from the investment caution list last month and recently initiated a free capital reduction to enhance capital soundness by offsetting accumulated losses.

The company also stated that its profitable businesses are operating smoothly. With steady sales primarily in the B2B sector such as smart cities, and ongoing negotiations for additional orders, City Labs plans to continue solid profitability aiming for a performance turnaround this year.

A City Labs representative said, “Following the recent announcement of the free capital reduction plan, some in the market have expressed negative views such as the possibility of a future paid-in capital increase. However, given City Labs’ current situation with a robust recovery in liquidity ratio and successful structural improvements across the company including restructuring, the capital reduction is just part of the process to improve financial health. There are no plans for additional paid-in capital increases, and we will focus solely on achieving a performance turnaround going forward.”

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