"Overseas Subsidiaries Drive Growth" Orion Reports H1 Sales of KRW 1.5789 Trillion, Up 7.6% YoY

Operating Profit Rises 2.4% to KRW 252.8 Billion
Driven by Overseas Growth and Export Expansion
Orion Maintains Upward Trend Despite Raw Material Cost Pressures

Orion achieved performance growth, driven by robust growth in its overseas subsidiaries in China, Vietnam, and Russia, as well as increased exports from its Korean subsidiary.

On August 14, Orion announced through a regulatory filing that its consolidated sales for the first half of this year reached KRW 1.5789 trillion, a 7.6% increase compared to the same period last year, according to provisional figures. During the same period, operating profit rose by 2.4% to KRW 252.8 billion, impacted by rising raw material prices for items such as cacao and oils and fats.

An Orion representative stated, "Despite a challenging business environment, including the economic downturn, we maintained sales growth by launching over 50 new products in the first half of the year through proactive research and development efforts." The representative added, "We plan to continue healthy growth in both scale and profitability by actively responding to rapidly changing domestic and international markets with differentiated product competitiveness and locally tailored sales strategies, while also ensuring thorough cost management."

By subsidiary, the Korean unit recorded sales of KRW 573.7 billion, up 4.4% year-on-year, and operating profit of KRW 94.9 billion, a 4.5% increase. While sluggish domestic consumption and the closure of retail stores limited domestic sales growth to 3.2%, exports grew by 11.6% thanks to increased sales of products such as Kkobuk Chip, Oh! Gamja, and Yegam, driving overall growth. Although rising raw material prices increased manufacturing costs, efforts to expand export volumes and reduce costs also contributed to higher operating profit.

In the second half of the year, the company plans to continue its top-line growth by strengthening sales focused on value-for-money products, expanding export volumes and diversifying product categories in major export markets such as the US, Europe, and China. Orion will also actively launch new products, as it did in the first half. In particular, the company aims to expand its low-sugar lineup-such as granola, pies, and bars-and introduce products with enhanced nutritional and functional ingredients in line with health trends. Orion will also break ground on the Jincheon Integrated Center, investing a total of KRW 460 billion to boost exports and expand its domestic market. As raw material cost pressures are expected to intensify due to abnormal weather and volatile exchange rates, the company is also focusing on defending profitability.

The Chinese subsidiary posted sales of KRW 633 billion in the first half of the year, up 5.1% year-on-year despite the absence of the Lunar New Year effect. Operating profit was KRW 108.2 billion, down 1.7%. Growth was supported by an 83% increase in sales through high-growth channels such as snack shops. The slight decrease in operating profit was due to higher manufacturing costs from rising raw material prices and a temporary increase in market expenses related to dedicated channel operations in online and bulk markets.

In the second half, Orion will focus on expanding sales in growth channels. The company plans to increase exclusive products for snack shops, bulk markets, and convenience stores, and continue developing competitive dedicated channel operators. Additionally, Orion aims to actively target the health-conscious consumer segment by expanding its low-sugar product lineup tailored to local consumption trends.

The Vietnamese subsidiary achieved sales of KRW 230.9 billion, up 6.6% year-on-year, and operating profit of KRW 35.6 billion, a 2.3% increase. Growth in rice snacks and fresh potato chips, along with strong sales of new products such as Chamboongeoppang and Wangkkumteuli, drove performance. However, operating profit was affected by higher prices for key raw materials such as cacao and oils and fats.

In the second half, Orion will complete the expansion of its rice snack production line to meet surging local demand and will fully launch its new candy line. With a total of 13 rice snack lines in operation, the company expects to achieve the number one local market share within the year and further accelerate exports to neighboring countries such as Indonesia and the Philippines. Orion is also targeting new markets by expanding the lineup of its packaged bread brand Saebong to actively enter the breakfast bakery market and by launching low-sugar pies to secure market leadership. Additionally, construction will begin on a third factory to establish a foundation for mid- to long-term growth.

The Russian subsidiary recorded sales of KRW 148 billion, a 48.6% year-on-year increase, and operating profit of KRW 18.3 billion, up 25.5%. With plant utilization rates exceeding 120%, growth was driven by increased supply to major distributors such as X5, Tender, and K&B, as well as the acquisition of new clients. However, the increase in operating profit was smaller than the sales growth, as the price of cacao-the main ingredient for Choco Pie, which accounts for about 75% of total sales-rose significantly.

In the second half, Orion plans to strengthen its high-growth foundation by building a dedicated production line for Fresh Pie in response to rising local demand for pies, and by diversifying its product lineup with the launch of new products such as Chamboongeoppang.

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