Dong-A Socio Holdings continued its top-line growth in the first quarter this year, backed by sales expansion at key operating companies. However, analysts said profitability weakened somewhat due to rising cost burdens and weak results at some subsidiaries.
Dong-A Socio Holdings said on the 27th that first-quarter (January–March) sales on a consolidation basis were 351 billion won, up 22.6 billion won (6.9%) from a year earlier. Operating profit was 19.1 billion won, down 1.3 billion won (6%) from the same period a year ago.
The company said that while top-line growth at major operating companies drove higher sales, profitability slowed as the cost ratio rose due to external conditions.
By subsidiary, Dong-A Pharmaceutical Co., a healthcare specialist, led earnings growth. Dong-A Pharmaceutical Co.'s first-quarter sales were 188 billion won, up 17.9 billion won (10.5%) from a year earlier. First-quarter operating profit was 20.6 billion won, up 3.7 billion won (22.1%) from a year earlier.
The Bacchus and over-the-counter (OTC) segments led growth. The Bacchus business segment posted sales of 60.6 billion won, up 6 billion won (11%) from a year earlier, and the OTC segment rose to 65.7 billion won, up 9.7 billion won (17.3%). In contrast, the health functional food (HTC) segment recorded sales of 49.3 billion won, down 1 billion won (2.1%).
STgen Bio, a contract manufacturing organization (CMO) affiliate for biopharmaceuticals, posted weak results. First-quarter sales were 18 billion won, down 1.1 billion won (5.7%) from a year earlier. Operating profit plunged to 200 million won, down 1.7 billion won (89.1%) from a year earlier.
The company said the fixed-cost burden from lower sales led to weaker profitability. However, it noted that the business structure experiences quarterly volatility depending on client order schedules, and that annual plans are proceeding normally, including three orders this year totaling 21.1 billion won.
Yongma Logis, a logistics affiliate, faced higher expense burdens despite top-line growth. First-quarter sales were 110.6 billion won, up 9.7 billion won (9.6%) from a year earlier, but operating profit was 3.8 billion won, down 500 million won (10.4%) from a year earlier. The company said sales increased on new shipper wins, but the cost ratio rose due to higher fuel and logistics consumables costs.