[Cosmax]
[Cosmax]

Cosmax, a cosmetics original development manufacturer, posted record sales and operating profit in the second quarter, driven by surging global demand for K-beauty. Its Korean unit crossed the 500 billion won ($353 million) quarterly sales threshold for the first time, while its US unit — long challenged by profitability concerns — swung to an operating profit for the first time since its founding.

Cosmax disclosed Tuesday that its second-quarter sales reached 794.9 billion won, up 27 percent from a year earlier. Operating profit rose 21 percent to 73.7 billion won over the same period. Both figures are the highest ever recorded on a quarterly basis. The operating profit margin stood at 9.3 percent.

For the first half of the year, sales climbed 22 percent year-on-year to 1.48 trillion won, while operating profit grew 13 percent to 126.8 billion won.

Growth at the Korean unit drove the strong results. The domestic unit's second-quarter sales rose 23 percent year-on-year to 518.4 billion won, surpassing the 500 billion won quarterly mark for the first time. Operating profit also increased 13 percent to 56.4 billion won.

Among overseas units, the US operation showed the most notable improvement. The US unit posted second-quarter sales of 53.8 billion won, up 79 percent from a year earlier, and achieved its first-ever quarterly operating profit since the unit was established.

The US unit has spent years cutting fixed costs and streamlining operations while expanding its sales network to target indie brands in the western United States. Revenue from new customers in the western region began feeding meaningfully into results, and steady reorders from existing large customers in the second quarter allowed the unit to achieve both top-line growth and improved profitability simultaneously.

The China business also maintained its growth momentum. The Chinese unit's sales rose 33 percent year-on-year to 197.4 billion won. The Shanghai unit benefited from growth among local color-cosmetics customers, expanding sales of base makeup products such as cushion compacts and foundations as well as blushers and lip products. The Guangzhou unit saw results from diversifying its sales channels into online and export markets.

Southeast Asia also delivered broad-based growth. The Indonesia unit's sales rose 38 percent year-on-year to 28.9 billion won, as existing retail customers in convenience stores and supermarkets recovered and new customers including small general merchandise stores expanded. Exports to neighboring markets such as Malaysia, Singapore and India are also growing.

The Thailand unit posted sales of 24.9 billion won, up 8 percent year-on-year, supported by increased reorders of hit products from major customers. As output from large customers expands, the unit is also diversifying its revenue base by increasing supply of new brands through its original brand manufacturing segment.

"In the second half, we will further solidify our position as the world's No. 1 cosmetics ODM company, building on continued strength in skincare, expanding global K-beauty demand and the successful onboarding of new customers," a Cosmax official said.


boo@heraldcorp.com