CHA Biotech announced Thursday that the company revised its separate operating profit for 2018 from its previous surplus of 3.6 billion won ($3.1 million) to a deficit of 1.7 billion won.
“As a result of reviewing the revenue recognition criteria during the auditing, the change in account item and period recognition was partially changed in 2018 sales,” the company said.
As a result, CHA Biotech’s final separate financial statement for 2018 showed that the company registered 26.8 billion won in sales, down from the previous statements 31 billion won. The company also turned around to an operating loss of 1.7 billion won and a net loss of 5.4 billion won.
Consolidated operating profit decreased slightly after the correction but remained profitable. After adjusting for consolidation, the company registered sales of 484.3 billion won, while registering 14.9 billion won in operating profit and 19.6 billion won in net profit.
The biotech company announced that it had succeeded in converting to profit in its preliminary separate financial statement earlier. However, with the corrected financial report the company recorded an operating loss for five consecutive years.
However, as CHA Biotech passed the listing management exemption examination for the research and development enterprise in February, the concern regarding the re-designation of the administrative issue or the cancellation of the company’s listing on the stock market has been resolved.
“The company earning will have no impact on the administrative issue or the cancellation of the company's listing for the next eight years,” a company official said. “Although we recorded operating loss on separate financial statements as a result of this revision, the deficit decreased sharply year-on-year due to improved business structures in 2018.”
Cha Biotech plans to focus on business restructuring and aggressive market development such as research and development based on stem cell technology to accelerate the clinical progress of the treatment, CDMO business using cell therapy platform technology such as cell culture and cryopreservation, and external consulting related to cell therapy business, to restructure profitability.
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