Orion achieved solid performance in the first quarter thanks to steady growth in both domestic and overseas subsidiaries. As a result, it is expected to join the ‘3 trillion won club’ for the first time this year with annual sales exceeding 3 trillion won. According to the consolidated financial statements for the first quarter released on the 16th, Orion reported sales of 7.484 trillion won and operating profit of 1.251 trillion won, representing increases of 12.7% and 26.2% respectively compared to the same period last year. The company explained that the operating profit of the Chinese subsidiary, which transitioned to an indirect sales system to improve profitability, increased by 41.5% and contributed significantly to the overall performance. Orion expects to achieve sales of around 3.2 trillion won and operating profit of 560 billion won this year.
By examining the performance of each subsidiary, Orion’s Korean subsidiary saw sales of 271.6 billion won, a 9.5% increase from the previous year, and operating profit of 43.8 billion won, a 17.1% increase. The expansion of pie and biscuit production lines last year led to increased sales and operating profit through increased supply and cost-saving efforts.
The Chinese subsidiary recorded sales of 306.4 billion won and operating profit of 54.2 billion won, marking increases of 16% and 41.5% respectively from the previous year, driven by the effects of the major Chinese holiday, Chun Jie. The Vietnamese subsidiary achieved sales of 118.2 billion won, a 12.3% increase, and operating profit of 19.5 billion won, an 18.9% increase, due to increased sales of Lunar New Year gifts and aggressive sales activities in discount and convenience store channels.
While the Russian subsidiary achieved sales of 50.5 billion won, a 4.8% increase, operating profit decreased by 6% to 7.8 billion won. Despite the operation of a new chocolate pie production line and expanded distribution of new products like jelly and fresh pie, the devaluation of the local currency led to reduced profitability. Additionally, the affiliate Reigam BioScience, acquired in March, reported a pre-tax profit of 9.7 billion won in the first quarter, following a 100 million dollar milestone payment received for the Janssen technology transfer in January. Through a share issuance on March 29 that increased the market capitalization from 1.7772 trillion won to 2.4465 trillion won, cash flow improved, enabling accelerated drug research and development and clinical trials.
Orion’s subsidiary Showbox, a holding company for the film “Pamyo,” contributed to strong performance by recording an operating profit of 20 billion won in the first quarter, leveraging the film’s success. Orion plans to enhance its product portfolio and competitiveness this year to expand the market and focus on profitability-centered management. The Korean subsidiary will focus on expanding the North American market with snacks like “Kkwabaeg Chip” and is currently pursuing the establishment of a new logistics center and factory on a 57,000-pyong site in Jincheon, Chungcheongbuk-do.
The Chinese subsidiary completed its transition to an indirect sales system and will strengthen operations in snack shops and e-commerce channels. In the third quarter of this year, it plans to construct a potato flake production line and warehouse at the Xinyang factory, establishing a stable raw material supply system and cost efficiency for molded potato snacks, which account for approximately 40% of sales.
The Vietnamese subsidiary will expand sales of flagship products such as Chocopie and L-Star, streamline its product portfolio, and expand sales of popular brands. Plans are underway to expand and redevelop the Hanoi Yanpong factory and secure land for new factories in Hanoi and Ho Chi Minh City by the end of this year.
The Russian subsidiary aims to successfully launch a new jelly brand in the market, introduce molded cake products by the end of the year, and increase market share. The U.S. subsidiary recently launched Kkwabaeg Chip and entered high-growth distribution channels like Five Below and Miniso. If annual sales in the U.S. exceed 40 billion won, the company will consider establishing a local production factory.