Neofect Achieves Turnaround in Q3

Neofect, a healthcare company specializing in artificial intelligence (AI) and robotics, succeeded in turning a profit in net income for the third quarter of this year. With the launch of additional new businesses planned for the second half of the year, the pace of performance improvement is expected to accelerate further.

On November 18, Neofect announced that its consolidated comprehensive income for the third quarter of this year reached 300 million won. This marks a turnaround from a loss of 1.7 billion won in the third quarter of last year.

The turnaround is also clear on a separate basis. The company recorded 2.3 billion won in separate comprehensive income for the third quarter, compared to a loss of 2.2 billion won in the same period last year. Comprehensive income refers to the sum of net income and other comprehensive income, essentially representing the final net income.

A Neofect representative explained, "Actual net income is significantly higher than this figure, but due to the impact of derivatives, financial costs increased in non-operating expenses, which was reflected in the accounting profit and loss," adding, "There is no impact on the business environment or fundamentals."

For the third quarter of this year, consolidated revenue and operating profit were 3.4 billion won and negative 800 million won, respectively. Compared to the third quarter of last year, when revenue was 3.5 billion won and operating profit was negative 1.1 billion won, revenue decreased by about 5%, but profitability improved by nearly 20%.

The improvement in profitability is attributed to the reduction of fixed costs through management efficiency measures. The new management team reduced cost of goods sold by streamlining work assignments and consolidating business divisions. In fact, the cost of goods sold for the third quarter of this year was 1.7 billion won, a 16.41% decrease from 2.2 billion won in the same period last year.

With business conditions expected to improve both domestically and internationally in the fourth quarter following the third quarter, the trend of improved performance and net profit is likely to continue. In particular, the U.S. subsidiary (NEOFECT USA, INC.) and the German subsidiary (NEOFECT Germany GmbH) have begun to implement strategies to expand high value-added, AI-robot-based sales in their respective markets. Additionally, portfolio companies such as Wibrain and Giant Chemical are currently pursuing initial public offerings (IPOs), which are expected to have a positive effect on the company’s financial statements in the future.

A Neofect official stated, "This turnaround can be interpreted as a positive signal that the company’s growth is now on track," adding, "Management innovation measures such as the disposal of loss-making businesses, business structure reorganization, and financial structure improvement, which have been underway since the change in the largest shareholder last August, are expected to be completed within the year." The official continued, "Our core business continues to grow steadily, and with new businesses in biotechnology and cosmetics set to begin in earnest from the first half of next year, we expect significant changes in both revenue and operating profit."

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