Samsung Biologics expects stronger year after achieving sales milestone in 2020

[Photo provided by Samsung Biologics Co.]

Samsung Biologics Co., the world’s top contract manufacturing organization in terms of bioreactor capacity, anticipates stronger year on packed order book and increased operational capacity after exceeding sales milestone of 1 trillion won ($906 million) in 2020.

In its regulatory filing on Tuesday, Samsung Biologics reported an operating profit of 92.58 billion won ($83.9 mn) in the October-December period, up 63.75 percent from the previous quarter but down 13.45 percent on year. Sales reached a quarter record of 375.3 billion won, up 36.68 percent on quarter and 19.78 percent on year. Net profit came in at 96.22 billion won, up 71.58 percent on quarter but down 54.32 percent on year.

The record-high fourth quarter sales were driven by increased plant operations on the back of a surge in manufacturing contracts for Covid-19 treatments, the company said. In November, the company delivered an initial batch of Covid-19 antibody treatments to U.S. pharmaceutical company Eli Lilly under the long-term manufacturing agreement to mass produce the drug.

For the full year, Samsung Biologics raised 292.8 billion won in operating profit, jumping more than three-fold from the previous year on sales of 1.16 trillion won that soared 66.02 percent. Net profit also climbed 18.76 percent to 241 billion won during the same period.

Thanks to the improved utilization rates of its three plants, its operating profit margin nearly doubled from 13 percent in 2019 to 25 percent in 2020.

Shares of Samsung Biologics closed 5.86 percent higher at 849,000 won on Wednesday.

The company attributed its strong earnings despite challenges from Covid-19 to its “outstanding business agility in successfully managing its global supply chain” and its “Live Virtual Tour platform” that enabled client due diligence and real-time virtual inspections. Such efforts helped the company win $1.78 billion worth contracts last year, 2.5 times higher than the previous year.

Market analysts expected Samsung Biologics’ business would remain strong this year given its fat order book from last year.

During JP Morgan Healthcare Conference held online earlier this month, Samsung Biologics said that it has clinched a total 47 contract manufacturing orders (CMO) so far and has successfully opened a global contract development organization (CDO) research and development center. It also said it plans to focus on efficient operations of its production facilities this year and put out efforts to obtain early order for its fourth plant.

Samsung Biologics also announced plans to expand production capacity in the next 10 years and diversify its business portfolio to secure competitiveness and next-generation growth engine.

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