Huons Global, the holding company of Huons Group, said on the 15th that first-quarter operating profit on a consolidation basis was 9.2 billion won, down 64.1% from a year earlier. Sales for the same period fell 1.1% to 197 billion won.
The slump at core affiliate Huons directly affected overall results. On a consolidation basis, Huons posted first-quarter sales of 141.9 billion won, an operating loss of 650 million won, and net profit of 190 million won. Sales fell 2.7% from a year earlier, and operating profit swung to a loss.
A temporary halt in exports to the United States and the shutdown of the continuous glucose monitor business weighed on sales. Profitability deteriorated as the company booked 5.3 billion won in sales warranty expenses in the first quarter all at once due to a preemptive recall of products distributed in the United States.
Still, Huons maintained its investment stance to secure future growth engines. First-quarter research and development (R&D) expense was 11.7 billion won, up 18% from a year earlier. The company plans to lay a foundation for growth by expanding its vaccine distribution business in collaboration with global pharmaceutical companies. Recently, as part of a business structure overhaul, it also decided to absorb and merge subsidiary Huons Life Sciences. It said it aims to streamline the business structure to reduce selling, general, and administrative expenses.
Aesthetics affiliate Humedix saw a slight increase in sales but weaker profitability. On a separate basis, Humedix reported first-quarter sales of 40.5 billion won and operating profit of 8.9 billion won. Sales rose 1% from a year earlier, but operating profit and net profit fell 22% and 3.2%, respectively. Sales grew on the back of expanded distribution channels for the skin booster product "Re2O" and the cosmetics business, but higher selling, general, and administrative expenses were a burden.
In contrast, cosmetics component affiliate HuM&C showed the most notable growth within the group. On a consolidation basis, HuM&C posted first-quarter sales of 14.5 billion won and operating profit of 800 million won. The figures were up 15.8% and 60.7%, respectively, from a year earlier, marking a quarterly record. Improved results were driven by increased demand for vial (bottle) containers as the health functional food market expanded and growing demand for prefilled syringes (PFS) amid growth in the cosmetics and beauty market.
Botulinum toxin affiliate Huons Biopharma posted first-quarter sales of 5.1 billion won and an operating loss of 800 million won. As competition intensified in the domestic toxin market, contract manufacturing sales fell, and the impact of provisioning for bad debts added to a swing to loss.
Huons Global views the first-quarter weakness as a temporary effect and plans to pursue a rebound from the second quarter. It said it will improve profitability by enhancing operational efficiency across all affiliates and strengthening a sales strategy focused on high value-added products.
Song Su-young, CEO of Huons Global, said, "The first quarter was a period when we pursued investment and structural improvements for sustainable growth," adding, "We will work to improve results, secure future growth engines, and expand shareholder returns based on our business competitiveness."