|Demonstrate record-high quarterly sales of KRW 678.1 billion||2018-08-01|
- KRW 129.3 billion in operating profit, the largest ever among 2Q performances
Coway announced that its achieved record-high sales on a quarterly basis in 2Q 2018. 2Q sales and operating profit increased 8.8% and 7.2% year-on-year to KRW 678.1 billion and KRW 129.3 billion, respectively. Sales was the highest ever on a quarterly basis and operating profit was the highest among 2Q performances (based on K-IFRS consolidated financial statements).
These remarkable operating performances were mainly attributable to record-high rental sales at home and abroad, consistent growth of overseas business, and quarterly record-high rental sales of mattress.
▲ Record-high rental sales at home and abroad
Total rental sales at home and abroad increased 7.1% year-on-year to 509 thousand units, a new record on a quarterly basis. Growth in the domestic market was attributable to rental sales increase in key health appliances, particularly, including the CIROO Water Purifier and FWSS which are strategic products in 2018. Overseas rental sales also boosted on the back of higher-than-expected growth of Malaysia and the U.S. subsidiaries. Rental net adds of accounts reached 162 thousand in 2Q, the largest ever among quarterly performances, which resulted in attaining 6.77 million (5.84 million in Korea and 0.93 million in the world) in total. The company expects the number of accounts to exceed 7 million this year.
▲ Consistent growth of overseas business
Overseas sales in 2Q increased 48.9% year-on-year to KRW 133.0 billion backed by launch of new products and growth of local subsidiaries. Particularly, Malaysia and the U.S. subsidiaries attained impressive growth. Malaysia subsidiary succeeded in surpassing KRW 90 billion in sales for the first time on a quarterly basis and operating margin reached 17.4%, the highest ever. Sales of the subsidiary in 2Q increased 86.8% from the previous year to KRW 91.6 billion and the number of accounts also soared 47.1% to 796 thousand. The U.S. subsidiary also realized KRW 17.4 billion, an increase of 11.4%, in sales on the back of door-to-door sales growth and vigorous retail sales. The number of accounts rose 4.9% from the previous year to 113 thousand.
▲ Quarterly record-high rental sales of mattress
The homecare business also contributed to sales growth in 2Q. Rental sales of mattress grew 22.2% year-on-year to 39 thousand units, the largest ever among 2Q performances. The number of accounts increased 16.5% from the previous year to 393 thousand. Sales from homecare business reached KRW 46.0 billion, up 9.5% year-on-year.
▲ Expectation on continuous growth in the second half of this year
Coway plans to continue this sales growth trend by focusing on enhancing sales of two kinds of CIROO water purifiers (for family and business uses), boosting rental sales of FWSS, and solidifying leadership in B2B and B2G markets. Exploring new overseas markets with potentials that can recreate the success of Malaysia subsidiary will also be promoted.
Jae-ho Lee, the CFO of Coway, said, “Our consistent efforts for product and service innovation has led unwavering growth in most operating indices. We will devote ourselves to maintaining ascending growth in the second half of this year as well.”
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