Celltrion posts record Q2 earnings on sales expansion

Celltrion's Plant 1 in Incheon / Courtesy of Celltrion

Celltrion announced on Monday its earnings guidance for the second quarter of this year, projecting sales of 961.5 billion won ($691.28 million) and an operating profit of 242.5 billion won. The figures mark its strongest second-quarter performance yet.

According to the guidance, the sales and operating profit grew 9.9 percent and 234.5 percent year-on-year, respectively. The operating margin also improved to 25 percent.

The biotech attributed the growth to strong global sales of its existing products and an improvement in its sales mix toward high-margin drugs.

In particular, the sales of Remsima SC, Yuflyma, Vegzelma, Steqeyma and other high-margin products gained traction, boosting both revenue and operating profit. The company said high-margin products accounted for 53 percent of total sales, up from 30 percent a year earlier.

Celltrion expects its growth momentum to continue to be driven by high-margin products. In the second half of this year, the company plans to launch four new drugs — Omlyclo, Avtozma, Eydenzelt, Stoboclo and Osenvelt — in major markets, which is expected to further accelerate its earnings growth.

Along with new products, the company said it achieved a steady improvement in profitability through ongoing cost reduction efforts, including higher production yields, improved utilization rate at its third plant and completion of amortization for development costs of legacy products.

In the second quarter, the cost of goods sold ratio dropped to approximately 43 percent, down 15 percentage points from 58 percent a year earlier. Compared to the previous quarter, the figure also fell by 4 percentage points, significantly expanding the company’s profit margin.

“The sales of high-margin new products expanded in the second quarter, helping the company post its highest-ever second-quarter sales and operating profit,” a Celltrion official said.

“Since there are multiple favorable factors ahead in the second half of this year, such as the scheduled launch of new products in the United States and Europe, we will continue our company-wide efforts to drive further growth.”