COSMAX, a global cosmetics ODM (research, development, and manufacturing) corporations, announced on the 10th that, on a consolidation basis, its preliminary operating profit for the third quarter of this year came to 42.7 billion won, down 1.6% from the same period a year earlier.
Sales rose 10.5% year over year to 585.6 billion won, but net profit fell 48.3% to 10.7 billion won.
By legal entity, domestic business sales were 383.5 billion won, up 10.3% from a year earlier. In the basic products institutional sector, hydrogel mask packs and the sun care (ultraviolet protection) category saw strong demand and led growth, and sun care sales grew 80% on formulation innovation such as sun serums, resulting in a high share of sales.
However, domestic business operating profit was 34.3 billion won, down 13% from last year. COSMAX explained that a sharp increase in domestic indie brand clients temporarily raised initial service expense.
In China, consolidation sales were 140 billion won, up 22% from last year. The Shanghai entity saw a recovery in the cosmetics market in the third quarter and broad-based growth in basic product sales for major brands. The Guangzhou entity said that diversifying its offline channel customer base proved effective.
In the United States, the effect of a large inflow of new clients at the end of last year began to be reflected in sales, leading to revenue of 36.9 billion won, up 13.6% year over year. In addition, rebounds among existing major clients and a balanced mix between basic and color cosmetics reduced the size of the loss.
In Southeast Asia, Thailand continued its high growth. The Thailand entity posted sales of 15.2 billion won, up 36.1% from a year earlier. The Thailand entity began its OBM (own-brand manufacturing) business in earnest in the second half.
In Indonesia, sales were 21.5 billion won, down 33.4%. COSMAX explained that this was due to factors such as a contraction in domestic demand amid unstable local conditions and intensified competition from low-priced imports.
COSMAX expects year-end cosmetics demand to increase in the fourth quarter with shopping festivals such as China's Singles Day and U.S. Black Friday. It is focusing on developing and launching year-end-targeted new products and on production responses.
A COSMAX official said, "A recovery has been confirmed in major markets such as China and the United States thanks to stronger product competitiveness and an expanded client base," adding, "we will further solidify our competitiveness as the No. 1 global ODM through stronger competitiveness in high value-added products, including sun care, and region-specific business strategies."