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Empty duty-free stores hurt Hugel’s Q1 report

The drastic fall in duty-free shopping amid the ongoing global pandemic has eroded some 6 billion won ($4.9 million) from aesthetic solution company Hugel’s cosmetics product revenue.

Hugel’s first-quarter report, filed Wednesday, showed the company suffered a 16 percent drop in on-year revenue at 41.2 billion won, a 25.1 percent drop in on-year operating profit at 12.3 billion won and a 52.4 percent fall in on-year net profit at 6.6 billion won.

In the same period last year, Hugel had notched 49.1 billion won, of which cosmetics accounted for 9.2 billion won. This year, cosmetics revenue marked just 3.1 billion won.

The 12.3 billion won in operating profit is still better than the company had internally expected, however, as the consensus had predicted 10 billion won for operating profit, a Hugel official told The Korea Herald.

The slight buoy was accredited to the overseas performance of the company’s botulinum toxin, Botulax.

While sales of Hugel’s signature products Botulax and hyaluronic acid filler The Chaeum declined in the domestic market during February -- the period when Korea was worst-hit by the COVID-19 spread -- sales remained solid in overseas markets including Asia and Latin America, Hugel said.

The pandemic only caught on in overseas locations from April, the impact of which will be reflected in the second-quarter report.

Although domestic revenue of Botulax decreased by around 2 billion won, overseas revenue rose 44 percent year-on-year, according to the company.

Hugel’s CEO Sohn Ji-hoon said through a press release that Botulax’s China launch will materialize within the year, through which the company will experience further overseas growth. Botulax will be traded in China under the name Letybo.

As for members of the European Union, Hugel targets to complete its biologics license application within the first half of this year for a final product approval in 2021.

For the US, Hugel plans to submit BLA by the end of this year and obtain final approval by the end of 2021.

By Lim Jeong-yeo (