Cosmax Q3 profit surges 95% on global K-beauty demand

Detailed summary

South Korean cosmetics manufacturer Cosmax reported a 95 percent surge in third-quarter operating profit as strong global demand for K-beauty products drove record revenue and…

South Korean cosmetics manufacturer Cosmax reported a 95 percent surge in third-quarter operating profit as strong global demand for K-beauty products drove record revenue and improved profitability across its domestic and overseas operations.

Cosmax, a leading cosmetics original development manufacturer (ODM), said Wednesday that consolidated revenue rose 49.6 percent from a year earlier to 875.8 billion won ($652 million), the fastest growth among major South Korean cosmetics ODM companies.

Operating profit climbed 95 percent to 83.3 billion won, while net profit surged 317.72 percent to 44.5 billion won.

The results reflected sustained global demand for Korean cosmetics despite the second half of the year traditionally being a slower period for the industry. Higher sales volumes and a growing share of high-margin skincare products helped boost profitability through operating leverage.

Cosmax’s South Korean operations led the expansion, generating third-quarter revenue of 616.1 billion won, up 61 percent from a year earlier. Operating profit at the domestic unit jumped 97 percent to 67.7 billion won.

A company official attributed the growth to increased exports by skincare clients, along with new product launches and promotional campaigns in color cosmetics.

The U.S. business recorded the strongest growth among overseas subsidiaries, with revenue surging 88 percent to 69.5 billion won.

After turning profitable for the first time in the second quarter, the U.S. unit continued to benefit from rising orders from local independent beauty brands and major clients including L‘Oréal.

The company also shortened production lead times through customized services for individual clients and closer cooperation with its South Korean headquarters.

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