Samsung Biologics (207940) said third-quarter revenue rose nearly 20% even as currency swings and a union strike disrupted production. The company also raised its full-year revenue growth outlook to 20% from a previous range of 15% to 20%. The gains came as its first four plants kept running at high utilization rates while sales from the newly built Plant 5 and its U.S. facility in Rockville were added to the books.
Samsung Biologics reported revenue of 1.4903 trillion won ($1.04 billion) and operating profit of 640.1 billion won ($449 million) for the third quarter, according to a regulatory filing on the 21st. Compared with its pure contract development and manufacturing organization (CDMO) results before the spinoff of Samsung Bioepis in November last year, revenue rose 18.5% and operating profit gained 1.1%. Operating margin, however, fell 7.4 percentage points to 43.0% from 50.4% a year earlier.
The results drew attention because they were achieved amid internal and external uncertainties, including labor disputes and currency volatility. Concerns over production disruptions surfaced after a union strike in May, and friction over wages and performance bonuses has continued in recent months. Rapid currency moves have also emerged as a risk to earnings. About 95% of the company's revenue is denominated in dollars, while a substantial share of its costs, including domestic labor expenses, is paid in won.
High utilization rates at its production facilities drove the earnings growth despite those uncertainties. Plants 1 through 4 in Songdo maintained full operation, securing stable production volumes, while Plant 5, which began operating last year, is going through a ramp-up that gradually increases output. Analysts said revenue from validation batch production, which verifies the manufacturing process and quality of client drugs, has also contributed to results since the second half of the year.
The company's U.S. facility has become a new growth driver. Commercial production at the Rockville plant, acquired in March, has stabilized, allowing revenue recognition to begin in earnest.
Samsung Biologics also raised its full-year revenue forecast to 5.4684 trillion won from 5.32 trillion won. The earlier figure was based on the midpoint of its 15% to 20% growth range, while the new projection assumes 20% growth.