Seoul — As South Korea’s cosmetic exports shatter previous historical records, the country’s leading Original Development Manufacturing (ODM) heavyweights are experiencing contrasting fortunes. While giants like Cosmax and Kolmar Korea posted record-breaking quarterly net profits, industry peer Cosmeka Korea encountered a sharp contraction in profitability despite registering top-line growth.

According to regulatory filings released on Friday, Cosmax reported an astonishing 317.7% year-on-year surge in third-quarter net profit, reaching 44.5 billion KRW. Kolmar Korea similarly expanded its net earnings by 22.1% to 51.7 billion KRW. Both companies smashed previous corporate records for quarterly revenue, posting 875.8 billion KRW and 828.2 billion KRW respectively—translating to annual growth rates of roughly 49.6% and 21.3%.

The stellar tailwind stems from an unprecedented wave of global demand for K-beauty. Cumulative cosmetic shipments abroad through October reached 12.57 billion USD, comfortably eclipsing the entire 2024 annual export aggregate of 11.42 billion USD in a span of just ten months.

However, Cosmeka Korea stood apart from the industry-wide profit rally. Although the firm's overall third-quarter revenue advanced 35.7% to 247.5 billion KRW, operating profit stagnated at 27.2 billion KRW—a negligible 0.1% increase. Consequently, the company's operating margin compressed significantly from 14.9% a year ago to 11.0%. More acutely, net income plummeted 53.5% down to 10.4 billion KRW.

U.S. Performance and Exchange Rate Headwinds

Industry analysts point to regional operational divergence, particularly in the North American market, as a primary differentiator. While Kolmar Korea and Cosmax aggressive expanded their U.S. footprints—doubling local sales volumes—Cosmeka Korea’s American branch actually suffered a 26.1% reduction in local turnover, sliding down to 45.7 billion KRW.

Furthermore, business dependency profiles vary widely among the trio. While U.S. operations comprise a minor slice of total revenue for Kolmar Korea (approx. 2%) and Cosmax (approx. 8%), Cosmeka Korea relies heavily on its U.S. division, which accounts for roughly 18% of aggregate sales. This elevated exposure left Cosmeka disproportionately vulnerable to currency fluctuations, with foreign exchange translation losses heavily eroding net earnings as the Korean won strengthened.

Portfolio composition also played a critical strategic role. While competitors successfully captured North American market share by prioritizing color cosmetics (such as makeup lines constituting over 70% of Kolmar Korea's U.S. output), Cosmeka Korea’s American portfolio remained heavily skewed toward basic skincare and functional OTC products (exceeding 90% combined).

Strategic Response and Future Outlook

To counter overseas currency volatility and fortify its operational foundation, Cosmeka Korea is channeling 200 billion KRW into a major manufacturing facility expansion at the Ochang Science Industrial Complex in North Chungcheong Province. Scheduled to launch production lines early next year and achieve full operational capacity by 2028, the initiative is designed to anchor domestic manufacturing resilience.

Despite recent third-quarter hurdles, management remains optimistic about long-term scaling. Company representatives reaffirmed targets to leverage upcoming production upgrades and digital transformation (AX·DX) strategies, aiming to achieve an annual revenue milestone of 1 trillion KRW by 2027.

[ⓒ Global Economic Times. 무단전재-재배포 금지]