Samsung BioLogics raises sales, cuts loss

By Yoon Sung-won

Samsung is pushing to make a profit in the biomedicine business on the back of the improved performance in bio product contract manufacturing organization (CMO) operations last year, according to Samsung BioLogics Wednesday.

In its first earnings report since a successful initial public offering (IPO), Nov. 10 last year, the Samsung biomedicine affiliate highlighted its expectations for further improvement in profitability this year as it is gearing up to boost operations at its second plant in Songdo, Incheon.

According to a regulatory filing, Samsung BioLogics said it posted 30.4 billion won ($26.08 million) in operating losses in 2016, down 85 percent from a 203.6 billion won deficit in 2015. Annual sales reached 294.6 billion won, up 223 percent from 91.3 billion won year-on-year.

The company recorded 176.8 billion won in net losses last year, compared to 1.9 trillion won in net profit in 2015. Samsung BioLogics explained that the net gain in 2015 reflects a one-time accounting factor ― a non-operating profit of 2.7 trillion won in recognition of its stocks on its affiliate.

“This has been generated as a result of revaluation of our 91.2 percent stake of Samsung Bioepis in 2015,” the company said.

Samsung BioLogics said its first plant would be fully operational for the CMO business this year and its second plant initiated trial production last year, contributing to the increase in the company’s overall rate of operation as well as reducing losses.

“In 2017, we will maintain the first plant fully operational and gradually increase the operation rate at the second plant,” Samsung BioLogics said. “This will further improve our performance.”

The outfit said it has completed 60 percent of the construction of its third plant in Songdo and plans to finish it at the end of the year. Once completed, the plant is expected to be able to manufacture 180,000 liters of biomedicine products a year.

This will make Samsung BioLogics a global biomedicine producer with a total of 360,000 liters annual manufacturing capacity, exceeding Boehringer Ingelheim’s 240,000 liters and Ronza’s 260,000 liters.

On Wednesday, Samsung BioLogics closed at 155,000 won on the Seoul bourse, down 0.32 percent from the previous day.