GC Green Cross Posts 94% Drop in Q2 Operating Profit... "Impact of Deferred Influenza Vaccine Revenue"

Exclusion of GC Wellbeing from Consolidation
and Deferred Revenue from High-Margin Products

GC Green Cross announced on July 31 that its consolidated sales for the second quarter of this year reached 421.2 billion won, with an operating profit of 1.7 billion won, according to provisional figures. These numbers represent declines of 15.8% and 93.8%, respectively, compared to the same period last year.

This performance was affected by GC Wellbeing being excluded from the consolidated accounts and the recognition of revenue from high-margin seasonal products being deferred to the second half of the year.

Historically, GC Green Cross has recognized raw material sales for its influenza vaccine in the second quarter. However, this year, the production and supply schedules were adjusted due to delays in securing standard strains of seasonal influenza viruses at institutions designated by the World Health Organization (WHO). The entire batch of these raw materials was shipped this month and will be reflected in the third quarter's results.

Exports of Hunterase, a representative high-margin product for the treatment of Hunter syndrome, are also expected to be concentrated in the second half of this year and are likely to boost earnings in the latter part of the year.

By business segment, GC Green Cross reported individual sales of 138.4 billion won for plasma-derived products, 55.2 billion won for vaccines, 86.5 billion won for prescription drugs, and 36.3 billion won for over-the-counter drugs and consumer healthcare products.

GC Cell posted sales of 41.6 billion won. The company reduced its operating loss by 80% compared to the previous quarter and turned a profit for the first time in about two years, with a net profit of 2.2 billion won.

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