Getting Back on Track
Orion Corp.’s overseas business is showing obvious signs of recovery.
A consensus estimate of the company’s consolidated operating profits in the third quarter is 85 billion won (US$71.13 million), up 8.02 percent from a year earlier, according to financial market tracker FnGuide on Sept. 23. A consensus estimate of its sales in the third quarter is 529.50 billion won (US$443.10 million), an increase of 7.25 percent on year.
They are the highest quarterly figures after 2017 when the company’s performance had been hit hard by China’s retaliatory measures from the THAAD deployment on the Korean Peninsula.
The company’s annual sales and operating profit are also expected to surpass 2 trillion won (US$1.67 billion) and 300 billion won (US$251.05 million), respectively, this year for the first time since 2017. The consensus estimates of Orion’s annual sales and operating profit are 2.01 trillion won (US$1.68 billion) and 301.80 billion won (US$252.55 million), respectively, up 4.28 percent and 6.95 percent.
The improvement in Orion’s performance is largely due to a recovery in the Chinese market, accounts for half of Orion’s total sales.
The operating profit of Orion came to 199 billion won (US$166.53 million) in the Chinese market in 2016 but the figure decreased to a tenth, 19 billion won (US$15.90 million), in 2017 because of the THAAD issue, according to data from Daishin Securities Co. The company posted 142 billion won (US$118.83 million) in operating profit last year, showing an improvement, and is forecast to record 159 billion won (US$133.05 million) this year. The company’s sales in China are also estimated at 971 billion won (US$ 812.55 million) this year, up 4 percent from last year. This is because Orion have released new products in the market.
Orion launched six snacks and jellied products in China at the end of May. Cho Sang-hoon, an analyst at Samsung Securities Co., said, “It is encouraging that consumers display a favorable response to new snacks released in China in May and the company is expanding its sales outlets to the southern region of China. Orion had an operating profit rate of 20.6 percent in August this year, which is the second highest figure after January, the season of the Chinese New Year, also known as Spring Festival.”
In addition, the company is showing a steady growth in size in Vietnam and Russia. Daishin Securities said Orion’s sales in Vietnam had increased from 205 billion won (US$171.82 million) in 2016 to 221 billion won (US$185.23 million) in 2017 and 234 billion won (US$196.13 million) in 2018. Sales in Vietnam are also expected to go up 3.9 percent on year to 243 billion won (US$203.67 million) this year. Orion’s sales estimate in Russia this year stands at 73 billion won (US$61.19 million), up 12.3 percent from last year.