Sharing Warmth Daehan Nupharm

Daehan New Pharm Co., Ltd. First Half Financial Results Analysis

2009.08.13

Daehan New Pharm Co., Ltd. First Half Financial Results Analysis

1. Slight Increase in Sales (Unit: million KRW)

	2009 First Half	2008 First Half	Increase/Decrease	%
Pharmaceuticals	15,334	12,452	2,882	23.1%
Veterinary Medicine	4,268	6,318	-2,050	-32.4%
Subtotal	19,602	18,770	832	4.4%
Cosmetics	24	2,038	-2,014	-98.8%

- Discontinuation of Avent business at the end of the first half of this year.
- Excluding the discontinued business (Cosmetics), sales of Pharmaceuticals and Veterinary Medicine rose slightly by 4.4% compared to the previous year.

2. Significant Improvement in Operating Profit (Unit: million KRW)

	2009 First Half		2008 First Half		Increase/Decrease	Increase/Decrease %
	Amount	Profit Margin	Amount	Profit Margin	Increase/Decrease	Increase/Decrease %
Pharmaceuticals	2,170	14.2%	326	2.6%	1,844	565.6%
Veterinary Medicine	539	12.6%	54	0.9%	485	898.1%
Subtotal	2,709	13.8%	380	2.0%	2,329	612.9%

- Operating profit in 2009 was 2.7 billion KRW, profit margin improved significantly to 13.8% (2008 operating profit was 0.38 billion KRW, profit margin 2.0%).

1) Organizational and Workforce Restructuring (Unit: million KRW)

- Reduced workforce from 270 employees on June 30, 2008 to 174 employees on June 30, 2009, a cut of 96 employees.
- Labor costs reduced by approximately 700 million KRW compared to the same period last year.

	2009 First Half	2008 First Half	Increase/Decrease
Salaries	3,334	3,934	-600
Employee Benefits	427	525	-98
Total	3,761	4,459	-698

2) Management Focused on Profitability and Rebuilding Business Model

- Pursuit of strictly profitability-oriented management resulting in cost reduction and profit increase.
- New Business Model
- Shifted from direct sales to pharmacies and hospitals to logistics and sales agency through comprehensive wholesalers (9 companies) and general distributors, leading to shorter distribution terms and earlier accounts receivable collection, thereby reducing costs and improving cash flow.

3) Focus andion of Products

- Focused on profitable products to increase sales and profitability.
- From about 400 products in 2008 to around 130 highly profitable products as of the end of June 2009.

4) Cost Reduction

- Company-wide cost savings reduced expenses by about 400 million KRW compared to the same period last year.

3. Improvement in Financial Structure

1) Liquidity Improvement (Unit: million KRW)

	2009 First Half	2008 First Half	Notes
Current Assets	41,347	38,959
Current Liabilities	26,160	34,802
Liquidity Ratio	158.1%	111.9%

2) Debt Ratio Improvement (Unit: million KRW)

	2009 First Half	End of 2008	Notes
Debt	31,516	42,049
Assets	80,666	77,064
Debt Ratio	39.1%	54.6%

3) Improvement in Asset Composition (Unit: million KRW)

	2009 First Half	End of 2008	Increase/Decrease	Notes
Investment Assets	32,118	41,497	-9,379	Long-term Loans
Percentage of Total Assets	28.6%	34.8%	-6.2%

- Recovered 8 million USD of long-term loans as of June 30, 2009, greatly reducing long-term loans.
- Asset composition ratio improved from 34.8% in the same period last year to 28.6% in this term, a 6.2% improvement.

4. Outlook for the Second Half (Unit: million KRW)

- Based on the intensification of profitability-focusedion and concentration strategy and establishment of a new business model, continuous increases in sales and profits are expected in the second half.
- Second half sales are expected to reach 21 billion KRW and operating profit 3.3 billion KRW.
- For the full year, sales are projected at 40.6 billion KRW, operating profit at 6 billion KRW, with a target operating profit margin of 15%.

	2009 First Half	2009 Second Half	Annual Total
Sales	19,602	21,000	40,602
Operating Profit	2,709	3,300	6,009
Operating Profit Margin	13.8%	15.7%	14.8%

List

대한뉴팜

Investors

Updates