Huons Global, a South Korean healthcare group, delivered best sales for the first half but nevertheless saw its operating profit fall 7.6 percent due to increased production and R&D costs.
Huons Global disclosed operating profit in the first six months at 32.2 billion won ($26.5 million), down 7.6 percent on year.
Shares of Huons Global fell 1.97 percent to close Wednesday at 27,350 won.
Its bottom line suffered due to increased processing costs to subcontractors and aggressive R&D spending to fund clinical trials, the company explained.
But sales were up 18.2 percent on year at 209.6 billion won, a record high, thanks to solid growth across its main subsidiaries.
Huons, the pharmaceutical arm, saw operating profit tumble 12.5 percent to 20.8 billion won while sales jumped 9.8 percent to 169.3 billion won over the same period. Its primary pharmaceutical and contract manufacturing business led the group growth, with sales gaining 16.4 percent and 8.6 percent, respectively.
Affiliates Huons Natural, Biotopia and Huons Nature also contributed to overall growth.
Huons Natural reported a 46 percent growth in revenue thanks to its “InnerSet Honeybush” nutricosmetics line and original equipment manufacturing business. Huons Nature sustained its operating profit for the second quarter.
Huons said total operating costs climbed 7 percent in the first quarter as subcontractor processing costs surged 38.8 percent on year to 14 billion won, primarily to meet this year’s ambitious target in its main drug sales.
Its R&D expenses also jumped 28.5 percent to 11.9 billion won to support the development of new products. Huons is currently in the phase 3 clinical trial of its nanocomposite eye drops and the phase 3 clinical trial of Liztox, a botulinum toxin for the treatment of eye wrinkles
By Kim Byung-ho and Kim Hyo-jin
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