Yuhan Corporation's Q3 Operating Profit Rises 44%, Net Income Falls 21%

Revenue: KRW 585.7 billion; operating profit: KRW 34.7 billion
Net income: KRW 14.4 billion amid non-operating losses
Down QoQ on high base from Q2 milestone payments

Yuhan Corporation significantly increased its operating profit in the third quarter, driven by growth in its pharmaceuticals and healthcare businesses and higher licensing revenue. However, net income declined as non-operating losses grew.

Yuhan Corporation disclosed on October 28 that, on a standalone basis, it posted third-quarter revenue of KRW 585.7 billion and operating profit of KRW 34.7 billion. Revenue rose 6.3% and operating profit increased 44.2% from the same period a year earlier. Its operating margin was 5.9%, up 1.5 percentage points year over year. Net income fell 20.8% to KRW 14.4 billion.

Exterior view of Yuhan Corporation's headquarters. Yuhan Corporation

By business segment, revenue from the company’s core pharmaceuticals business rose 4.5% to KRW 373.8 billion. Sales of over-the-counter products, including nonprescription drugs, increased 8.6%, while sales of prescription products, including prescription drugs, rose 3.7%. Revenue from the healthcare division climbed 32.7% to KRW 69.2 billion. Licensing revenue from technology export agreements increased 82.7% to KRW 7.9 billion. In contrast, revenue from overseas operations, primarily exports of active pharmaceutical ingredients, fell 1.3% to KRW 133.3 billion.

The decline in net income was due to losses in the non-operating segment. Pretax profit in the third quarter was KRW 15.5 billion, KRW 19.2 billion less than operating profit. A year earlier, pretax profit of KRW 28.7 billion exceeded operating profit of KRW 24.1 billion by KRW 4.6 billion.

Compared with the previous quarter, revenue fell 4.6% and operating profit declined 43.4%. In the second quarter, licensing revenue reached KRW 58.9 billion, reflecting milestone payments related to Leclaza, a novel lung cancer drug whose active ingredient is lazertinib. There were no similar one-off technology milestone payments in the third quarter.

Cumulative results continued to grow. From January through September, standalone revenue rose 8.4% to KRW 1.7094 trillion, while operating profit increased 34.0% to KRW 105 billion. Cumulative net income rose 3.0% to KRW 99.3 billion. On a consolidated basis, third-quarter revenue was KRW 604.3 billion, operating profit was KRW 33.2 billion, and net income was KRW 17 billion. Cumulative consolidated revenue was KRW 1.7705 trillion, and operating profit was KRW 108.9 billion.

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