Coway’s Q2 earnings plunge on nickel scandal

[THE INVESTOR] Coway, the nation’s No. 1 water purifier rental service firm, said on Aug. 2 its second-quarter operating profit plunged 89.3 percent to 11.8 billion won (US$10 million) on-year largely due to its recent recall of nickel-tainted products. 

Net profit also nosedived 96.6 percent to 2.8 billion won during the April-June period from a year ago, while sales were down 0.1 percent to 555 billion won.

The company faced a public outcry after the toxic chemical nickel was detected in some of its water purifiers on July 1. The company was also found to have hid the fact over the past year without informing customers.

The company was forced to recall a total of 106,512 products during the cited period, spending a combined 67.9 billion won.

“We will reevaluate our brand value and make all out efforts to restore customer trust,” the company said in a statement.

By Lee Ji-yoon (jylee@heraldcorp.com)