Pharma Sector's Operating Profits Decline Overall; Half of Small/Mid-Sized Firms Report Losses
More than half of domestic listed pharmaceutical companies saw their operating profits decline last year, indicating a widespread deterioration in industry profitability. In particular, one out of every two small and mid-sized pharmaceutical companies recorded a deficit, signaling a deepening performance slump. An analysis of 64 listed pharmaceutical companies with fiscal years ending in November and December revealed that 35 companies, or 54.7% of the total surveyed, experienced a decrease in operating profit compared to the previous year. The decline in profitability was more pronounced for companies with smaller revenue scales, and the performance downturn intensified among small and mid-sized drugmakers.
Profitability gaps widened based on revenue size. The average operating profit margin for top-tier pharmaceutical companies with quarterly sales exceeding 500 billion won increased by 0.65 percentage points. In contrast, the average operating profit margin for small companies with annual sales below 100 billion won fell by 3.12 percentage points to 1.71%. The overall average operating profit margin for all surveyed companies was 6.82% and the net profit margin was 6.16%, both showing a slight increase from the previous year. However, this is attributed to the improved performance of the leading pharmaceutical firms.
Deficits were frequently reported, particularly among small and mid-sized pharmaceutical companies. Six companies, including LeeAon Pharm, Korea Pharma, CMG Pharm, WhaiMyungsin Pharm, Seoul Pharma, and HanAll Biopharma, transitioned into operating losses. LeeAon Pharm recorded an operating deficit of 30.4 billion won, and Samsung Pharmaceutical posted an operating deficit of 18.1 billion won. Companies such as Il-Sung IS, Cho-A Pharm, Samsung Pharmaceutical, BC World Pharm, and Kyungnam Pharmaceutical continued to experience operating deficits.
Meanwhile, some companies saw their performance improve or successfully turn around from losses to profits. Shin Poong Pharmaceutical, Jeil Pharmaceutical, Allico Pharmaceutical, and Samsung BioLogics successfully shifted from losses to profits in 2024. Daewoong Pharmaceutical recorded operating profit of 203.6 billion won, being the only company among those surveyed to exceed 200 billion won. Hanmi Pharmaceutical and Yuhan Corporation both saw their operating profits increase by more than 40 billion won compared to the previous year.