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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Foreign subsidiary losses and elevated debt temper outlook ahead of bond sale
Kolmar Korea is seeking to improve its debt structure, but underperformance at overseas subsidiaries is weighing on its financial outlook.
The company is set to conduct bookbuilding for KRW 50 billion in corporate bonds, with the possibility of increasing the issuance to KRW 60 billion depending on investor demand.
While overall earnings have improved—supported by strong K-beauty exports and rising European makeup sales—overseas operations remain a drag. Consolidated operating profit for the first nine months of last year rose 20.8% year-on-year to KRW 191.7 billion, while revenue increased 11% to KRW 2.07 trillion.
However, losses in the United States and China continue to pressure profitability. The U.S. subsidiary remains in the red due to delayed orders and increased fixed costs following completion of a second plant. Subsidiary Yanwoo and the HB&B division also posted operating losses, slowing qualitative improvement in consolidated earnings.
Net debt stood at KRW 896.6 billion as of the end of the third quarter, equivalent to 56.1% of total equity—above the generally accepted comfort level of around 50%. Although net debt declined slightly from year-end levels, the reduction was largely due to temporary working capital changes rather than structural improvement in operating cash flow.
Analysts caution that financial risks remain, suggesting it may be premature to view the company’s balance sheet as fundamentally strengthened.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
