Hugel Q2 OP dn 2.8% on higher costs from cosmetics biz

2019.08.14 11:50:20 | 2019.08.14 15:32:06

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South Korea’s beauty drug company Hugel Inc. reported a 2.8 percent fall in operating profit in the quarter ended June as setback in cosmetics business ate away brisk sales of its mainstay Botulax and filler products.

Hugel in its regulatory filing on Tuesday announced its consolidated operating profit in the April-June period reached 15.97 billion won ($13.2 million), down 2.8 percent from a quarter ago and 4.5 percent from a year earlier. Net profit also declined 8.8 percent on quarter and 19.7 percent on year to 12.83 billion won, while sales added 2.4 percent and 17.3 percent to 50.29 billion won, the highest-ever for the quarter.

Hugel shares on Wednesday closed 0.48 percent higher at 352,700 won in Seoul.

For the full six-month period, the company raked in an operating profit of 32.4 billion won, down 17 percent from the previous year. Net profit slid 27.9 percent on year to 26.89 billion won, but sales gained 12.1 percent to 99.41 billion won.

Its mainstay product botulinum toxin container Botulax saw sales decline 5.4 percent against strong year-ago number, Hugel said. But the company noted that Botulax maintained its lead in the home market with a sales improvement in Asia, and hyaluronic acid (HA) filler products also sold well in overseas markets.

The Botulax business delivered 14.7 billion won in revenue at home, and its overseas sales are growing steadily on robust demand from Asian countries like Taiwan and Thailand.

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Another key product HA filler also saw improvement in sales both at home and abroad. Sales of HA filler products in European countries jumped 38.7 percent on quarter and 183 percent on year. Cumulative sales at home in the first six months grew 33.8 percent from a year-ago period after the launch of premium lineup The Chaeum Style in March.

But the profitability of its cosmetics business deteriorated in the quarter due to tighter regulations in China, the company said.

Hugel is upbeat about the second half as it is set to launch more aggressive marketing campaigns for its products at home to cement its market dominance and make headways into other overseas markets.

It has applied for a marketing license for Botulax in China in April and is waiting for final approval from the authorities with an aim to release it officially in the first quarter of next year in the country. It also is expecting to obtain sales approval from Europe and the U.S. by 2021 and 2022, respectively.

Separately, Hugel is planning to apply for the approval of additional indication for crow’s feet lines in the latter half of this year. Botulax currently has been approved for four cases of indication - blepharospasm, glabellar lines, post-stroke upper-limb spasticity and foot deformity in pediatric cerebral palsy.

By Kim Byung-ho and Lee Ha-yeon

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