Orion "Slight Decline in Q1 Operating Profit Due to Cost Burden" (Comprehensive)

991 billion KRW, down 8.7% from the same period last year
Sales reached 663.8 billion KRW, up 1.6%

Orion announced on the 15th that its consolidated operating profit for the first quarter of this year was 99.1 billion KRW, down 8.7% compared to the same period last year. Sales increased by 1.6% to 663.8 billion KRW.

Orion explained, "We focused on expanding market share, resulting in sales growth compared to the same period last year, but operating profit declined due to increased cost burdens caused by global inflation."

However, the China and Vietnam subsidiaries recorded sales growth of 11.2% and 20.2%, and operating profit growth of 20.8% and 8.7%, respectively, on a simple cumulative basis from November last year, when the holiday peak season began, through March this year.

The Korean subsidiary continued double-digit growth by expanding market share in key categories such as snacks, pies, biscuits, jelly, and Dr. You, and launching competitive new products. Orion stated that it plans to continue focusing on expanding market share through aggressive sales activities based on a value-for-money strategy that provides the best value to consumers, by continuously introducing differentiated new products to maintain high growth momentum beyond the second quarter. The company expects profitability to improve from the second half of the year.

The China subsidiary plans to focus on expanding sales of snacks such as fresh potato snacks and jelly, which has recently seen a surge in demand, amid expectations of improved local consumer sentiment due to the reopening (resumption of economic activities). In particular, the jelly production line will be expanded to significantly increase supply. As it is a market with high potential, the company expects substantial growth through strengthening product quality and sales capabilities.

The Vietnam subsidiary plans to further widen the gap with competitors by expanding market share based on superior product quality and sales capabilities, and through aggressive investments such as expanding existing factories and establishing new ones. In particular, it plans to significantly increase supply by expanding the production lines for fresh potato snacks and rice crackers, which are operating at nearly 100% capacity, and actively pursue entry into new categories to establish a foundation for sustained high growth.

The Russia subsidiary successfully diversified its Choco Pie product lineup and began full-scale operation of the new Tver factory in the second half of last year. It continues high growth with a factory operating rate reaching 130% as of the first quarter. The company is preparing to expand the pie production line and plans to actively expand new categories by establishing a local production system for jelly.

Additionally, the India subsidiary plans to expand the production line of Choco Pie, which has successfully established itself in the premium confectionery market, and aggressively target the snack market by expanding the sales channels of five types of Kkobuk Chip, reflecting local food culture, throughout India.

An Orion official said, "Despite global inflation and differences in holiday timings in China and Vietnam, we focused on market expansion based on product quality and sales capabilities, continuing sales growth," adding, "We will pursue both external growth and profitability improvement simultaneously through competitive new product development and large-scale investments."

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