Samsung BioLogics Q3 operating profit down 55.7% on production changes

Samsung BioLogics said Tuesday that its third-quarter operating profit fell 55.7 percent on-year to 10.5 billion won ($9.23 million), attributing the decline to production changes at two of its biologics manufacturing plants.

The company’s revenue in the July-September period reached 101.1 billion, down 19.4 percent from the previous year. The drop in revenue was also accredited to production changes at the firm’s No. 1 and No. 2 plants.

Samsung BioLogics said that the products being produced at the two plants have changed, bringing down its operations rate. And this shift led to the decline in operating profit and revenue, it explained.

Meanwhile, the company reported a net loss of 30.1 billion won during the quarter, marking a 4.9 percent rise from a net loss of 3.17 billion won a year earlier. The company attributed the loss to unrealized gains related to inventory handling.

Unrealized gains refer to an accounting practice where sales transactions with subsidiaries are deducted from the parent company’s profits until the actual sale takes place, according to Samsung BioLogics.

As of now, Samsung BioLogics’ first two plants have been fully booked with production orders. Its third plant began production earlier this month, based on the preliminary orders it has already received. The firm plans to continue procuring more client orders for its No. 3 plant, it said.

By Sohn Ji-young (jys@heraldcorp.com)