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Daehan New Pharm Co., Ltd. Analysis of Financial Results (January–December 2009)

2010.03.05

Daehan New Pharm Co., Ltd. Analysis of Financial Results (January–December 2009)

1. Increase in Product Sales

(Unit: Million KRW)

		Jan–Dec 2009	Jan–Dec 2008	Change	%
Sales	Products	38,643	30,695	7,948	25.9%
	Merchandise	1,760	3,282	-1,522	-46.4%
	Total	40,403	33,977	6,426	18.9%

- The company discontinued its Avent cosmetics business as of mid-2009.

- Sales from the discontinued business: KRW 24 million in 2009 vs. KRW 4,197 million in 2008.

- As a result, merchandise sales decreased sharply, while product sales increased by 25.9% compared to the previous year.

2. Significant Improvement in Operating Profit

(Unit: Million KRW)

	Jan–Dec 2009	Jan–Dec 2008	Change	Change (%)
Operating Profit	5,453 (13.5%)	2,736 (8.1%)	2,717	99.3%
Non-operating Income	3,540	10,990	-7,449
Non-operating Expenses	6,643	6,366	277
Income before Income Taxes from Continuing Operations	2,350 (5.8%)	7,360 (21.7%)	-5,009	-68.1%

(1) Operating profit reached KRW 5.45 billion (margin 13.5%) in 2009, up from KRW 2.74 billion (margin 8.1%) in 2008, representing a 99.3% year-on-year increase.

1) Achieved cost reduction and profit improvement through strict profit-oriented management.

2) Enhanced both sales and profitability bying and focusing on high-profit products.

(2) Income before income taxes from continuing operations was KRW 2.35 billion (margin 5.8%) in 2009, compared with KRW 7.36 billion (margin 21.7%) in 2008, showing a decrease from the prior year.

(Unit: Million KRW)

	Jan–Dec 2009	Jan–Dec 2008	Change	Remarks
Foreign Exchange Gains	336	10,659	-10,323
Foreign Exchange Losses	2,408	231	2,176

- A foreign exchange loss occurred due to the depreciation of the Korean won related to USD 22 million in loans receivable.

- Income before income taxes from continuing operations decreased by approximately KRW 5 billion (68.1%) year-on-year, mainly due to this foreign exchange loss. However, this was a non-cash loss with no actual cash outflow.

3. Improvement in Financial Structure

1) Improved Liquidity

(Unit: Million KRW)

	End-2009	End-2008	Remarks
Current Assets	46,034	38,959	Increase by 7,075
Current Liabilities	24,486	34,802	Decrease by 10,316
Current Ratio	188.0%	111.9%

- Current ratio improved from 111.9% at the end of 2008 to 188.0% at the end of 2009, an improvement of 76.1 percentage points.

2) Improved Debt Ratio

(Unit: Million KRW)

	End-2009	End-2008	Remarks
Liabilities	35,509	42,049	Decrease by 6,540
Assets	76,318	77,064
Debt Ratio	46.5%	54.6%

- Debt ratio improved from 54.6% at the end of 2008 to 46.5% at the end of 2009, an improvement of 8.1 percentage points.

3) Improved Soundness of Asset Structure

(Unit: Million KRW)

	End-2009	End-2008	Change	Remarks
Long-term Loans Receivable	25,687	41,498	-15,810
Total Assets	111,827	119,113	-7,286
Ratio to Total Assets (%)	23.0%	34.8%	-11.9%

- On June 30, 2009, USD 8 million in long-term loans were collected, resulting in a significant reduction in loan receivables.

- On July 1, 2009, USD 750,000 was collected as loan interest.

- On December 24, 2009, USD 3 million in long-term loans were offset through the acquisition of treasury stock.

- The ratio of long-term loans to total assets improved from 34.8% at the end of 2008 to 23.0% in the current year, a reduction of 11.8 percentage points.

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