Huons records Q1 sales of 145.8 billion KRW, operating profit of 12.8 billion KRW

- Operating profit increase by 20% YoY... efforts to strengthen its operations -

- Improved profitability driven by performance of subsidiaries and company-wide cost control -

Huons has improved its operating margin by improving the profitability of its subsidiaries.

Huons (CEO Song Soo-young) today announced its preliminary earnings for the first quarter of this year, reporting consolidated sales of 145.8 billion KRW, operating profit of 12.8 billion KRW, and net profit of 12.4 billion KRW, reflecting year-on-year changes of -1.3%, +20.1%, and +26.4%, respectively.

Huons reported solid sales with significantly improved operating margin of 8.8% on consolidated financial statements and 9.8% on separate financial statements. The company achieved the highest operating profit and operating margin in five consecutive quarters from the first quarter of 2024 to the present.

Huons' improved profitability in the first quarter is attributed to the performances of its subsidiaries and company-wide cost control efforts. Huons Foodience (now Huons N), a subsidiary specialized in health functional food business, turned profitable in the first quarter, while HuonsLifeSciences, specialized in ethical drug (ETC), narrowed its deficit, contributing to the improvement in Huons' consolidated net profit.

In addition, by managing and reducing major expenses on advertising and commissions, the SG&A (Selling General & Administrative Expenses) ratio decreased by 3.7%, from 43.2% in the previous year to 39.5%. Among all expenses, research and development expense, the company's key growth engine, continued to increase and be invested in.

By business segment, sales growth was led by ETC and diabetes medical devices. In ETC, domestic sales related to chronic diseases such as circulatory and metabolic diseases showed steady growth, and antibiotic prescriptions increased due to the flu epidemic at the beginning of the year. The company recorded 4.2 billion KRW (+19% YoY, +37% QoQ) on exports of injectable products to the US.

The company recorded sales of 19.1 billion KRW (-2.1% YoY) on contract manufacturing organization (CMO) business. The sales for eye drops including exports and CMO recorded 12.4 billion KRW, recovered with a 25% increase QoQ.

The beauty and wellness business recorded sales of 43.7 billion KRW, decreased by 10.4% YoY. The company commented that the sales temporarily declined during the process of the spin-off and merger of its health functional food business into a subsidiary.

Medical devices sales increased 34.2% year-on-year, driven by Dexcom G7 continuous glucose monitoring system expanding its market share and continuing to grow.