KPF Q3 Revenue Rises 21% YoY to KRW 211.3 Billion
Operating profit at KRW 882 million, down 90% year on year
Fastener specialist KPF announced on November 9 that its consolidated revenue for the third quarter rose 21.4% year on year to KRW 211.3 billion.
Operating profit for the same period was KRW 882 million, down 89.7% year on year. The company said, "The decline in the won-dollar exchange rate during the quarter weighed on profitability, while shipments in the third quarter were concentrated among products whose costs had risen following the sharp increase in oil prices, reducing earnings."
KPF is negotiating with customers to raise selling prices to reflect higher costs and improve profitability. However, because it takes time for price adjustments to be applied to shipped products, the company expects that it will take time to restore profitability through the fourth quarter of this year.
Over the medium to long term, the company plans to strengthen its growth foundation by expanding its production base in Vietnam. As efforts continue in major overseas markets, including the United States and Europe, to reduce reliance on China for sourcing, the competitiveness of KPF's Vietnamese subsidiary is gaining prominence. In the third quarter, KPF VINA recorded revenue of approximately KRW 30 billion, up 17.0% year on year.
The company will also invest in expanding its second plant to convert rising demand into revenue. It expects that securing additional supply capacity through the expansion and phased installation of equipment will create opportunities to win additional orders. It also plans to invest in improving production and logistics efficiency to boost profitability over the medium to long term.
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A KPF official said, "We will work to ease the burden of higher costs and restore profitability through negotiations with customers to adjust selling prices. Building on increased demand for our Vietnamese subsidiary amid supply chain restructuring in major overseas markets, we will expand our revenue growth foundation by enlarging our second plant and adding production equipment."
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