Boryung's First-Half Profit Drops Over 70% Year-on-Year to NT$582 Million Due to High Base Effect from One-Time Gain Last Year

Boryung (6472-TW) announced today (13th) its latest financial report, reporting a consolidated net profit of NT$582 million for the first half of the year, down over 70% year-on-year, with earnings per share at NT$4.56. Boryung explained that the profit decline was due to a one-time gain recognized last year from the disposal of Boryung Biotech, stemming from a strategic investment in Taiho-KY (6541-TW), which created a high base effect.

Boryung's second-quarter revenue reached NT$5.889 billion, up 47.19% quarter-on-quarter and 20.97% year-on-year. Gross margin stood at 41.26%, up 5.22 percentage points quarter-on-quarter but down 0.21 percentage points year-on-year. Operating margin was 16.74%, up 6.57 percentage points quarter-on-quarter but down 3.63 percentage points year-on-year. Net profit after tax was NT$556 million, a 20.38-fold increase quarter-on-quarter but down 9.89% year-on-year, with earnings per share at NT$4.36.

Cumulative revenue for the first half of the year reached NT$9.891 billion, up 5.82% year-on-year. Gross margin was 39.16%, down 2.66 percentage points year-on-year. Operating margin was 14.1%, down 3.81 percentage points year-on-year. Net profit after tax was NT$582 million, down 71.1% year-on-year, with earnings per share at NT$4.56.

Boryung stated that the second-quarter recovery was driven by improved utilization rates at its CDMO facilities, upward momentum in global sales operations, and contributions from the acquisition of WGN by its subsidiary Chen Hui Biotech (1271-TW). In terms of second-quarter revenue mix, CDMO accounted for 36%, global sales for 50%, and Consumer Healthcare (CHC) for 14%.

According to Boryung, the CDMO segment became the primary growth engine in Q2, supported by restored production capacity at its Maryland sterile injectables facility following scheduled maintenance and the ramp-up effects from capacity expansion at its Zhunan plant. New contract value signed during the first half reached US$378 million, with 14 new preclinical project molecules added. Moreover, MQL (Marketing Qualified Leads) for this segment reached 400 in the first half, matching the full-year level of the previous year. Additionally, Boryung recently signed a '10+2 year' manufacturing agreement worth billions, with the first phase of product transfer already initiated in Q2, expected to contribute revenues incrementally starting from 2027.

In the global sales segment, specialty and branded pharmaceuticals revenue increased 58.8% quarter-on-quarter. Prescription coverage for Vigabatrin, a rare disease treatment for pediatric epilepsy, surpassed 50%. Upsher-Smith maintained market share for its flagship GERD product DLS, and high-value generic drugs saw over 20% quarter-on-quarter revenue growth, benefiting from government customer inventory replenishment. Boryung noted that seven branded and generic drugs have been launched across various markets this year, with six additional generics awaiting approval, continuously diversifying its product portfolio.

Regarding the CHC business, Boryung stated that 70% of revenue comes from Weider-branded health supplements and food products, and will continue advancing its vertical integration strategy encompassing 'scientifically proven ingredients, branded products, and international distribution channels'.

Looking ahead to the second half, Boryung indicated that its CDMO segment has a 12-month backlog of orders totaling US$317 million. The recently acquired large-molecule formulation Rockville facility, finalized in July, will now be consolidated into financial statements, further boosting order visibility. Additionally, fill volume at the Maryland injectables plant is expected to exceed first-half levels in the second half.