APR achieved record second-quarter earnings on the back of rapid growth in the North American and European markets. As stronger-than-expected results continued, APR raised its revenue guidance for this year to 3 trillion won.
APR reported preliminary second-quarter revenue of 767.5 billion won on a consolidated basis, up 134.2% from a year earlier, the company said in a regulatory filing on the 5th. Operating profit over the same period rose 134.5% to 190.6 billion won. The figures exceeded market expectations. According to financial data provider FnGuide, APR had been expected to post revenue of 735.2 billion won and operating profit of 178.4 billion won. First-half revenue this year reached 1.3609 trillion won, on par with last year's annual revenue of 1.5273 trillion won.
Overseas business drove the revenue increase. Second-quarter overseas revenue surpassed 700 billion won, accounting for 92% of total revenue. North American revenue rose 264.6% from a year earlier to 376.3 billion won, as the company expanded its online channels and entry into major local retailers such as Target and Walmart. Europe posted revenue of 145.1 billion won, up 380.3%, driven by expanded entry into key online channels such as Amazon and TikTok Shop, centered on five major countries including the United Kingdom, France, Germany, Italy and Spain. Asia recorded revenue of 121.1 billion won, up 14.5% from a year earlier.
By business segment, the cosmetics-beauty division led the strong performance with revenue of 648.3 billion won, up 185.5% from a year earlier.
In a conference call held that day, APR said, "At the start of the year we set a revenue target of 2.1 trillion won for this year, but reflecting the rapid growth centered on the United States and Europe, we are raising it to around 3 trillion won." The company also emphasized that CEO Kim Byung-hoon recently accompanied President Lee Jae-myung on his visit to Brazil and confirmed the high local recognition of its brand Medicube, and said it would expand into the Latin American and Middle Eastern markets. An APR official said, "In the Middle Eastern and Latin American markets, Medicube is being recognized through social media such as Instagram, YouTube and TikTok, and its fandom is spreading, so there is potential for revenue to grow."
The company also unveiled the launch schedule for its new energy-based medical device (EBD) product. An APR official explained, "We have completed the domestic licensing procedures, and after obtaining approval, we plan to proceed with procedures for domestic sales at the end of this year or early next year," adding, "We are currently verifying product performance and feedback through a medical professional network, and are additionally forming sales and manufacturing organizations." Regarding skin boosters, the official said, "The PN (polynucleotide)-based product has completed the Ministry of Food and Drug Safety's medical device certification and export approval, so overseas sales approval has been completed," adding, "We began small-scale exports from the second quarter of this year, and overseas sales will begin in earnest from the third quarter."
APR forecast that its cost burden would ease as air logistics costs fall going forward. It explained that various one-off costs arose in the second quarter this year, particularly an increase of more than 10 billion won in air logistics costs. A company official said, "Amazon Prime Day was held a month earlier than scheduled, so we shipped large volumes by air to meet the cutoff period," while also noting, "In the case of shipments to the United States, we have secured a large amount of safety stock." The company said air logistics spending rose as it quickly shipped products by air to maintain a balanced number of stock-keeping units (SKUs), but forecast that costs would decrease as inventory increased. An APR official said, "We expect inventory in the U.S. and European markets to stabilize sequentially in the second half of this year," adding, "By the end of the second half, we expect inventory to increase to a level that would allow us to dramatically reduce air logistics."
