DRTECH H1 2019 Sales Results

DRTECH, the Korean originated supplier of x-ray detectors and image processing software published it’s 2019 first-half results during August. These indicate that the business achieved continued but slower sales growth during the second quarter. The companies sales revenue reached 21,873 million won which represents 9.7% growth year-on-year (YoY). Growth in sales revenue was driven by exports which grew by 13% YoY and accounted for approximately 75% of revenues. Revenues from domestic sales grew marginally by 1%.

Growth in export sales revenue was led by the companies range of indirect and direct flat-panel detectors (FPDs) which includes the FLAATZ, EXPRIMER and EXTREAM series of detectors for various medical and industrial applications. Revenues from the sale of indirect FPDs grew by 13% YoY reaching 8,919 million won and revenues from direct FPDs grew by 40% YoY reaching 2,719 million won. In contrast, export revenues from the sale of detectors specifically for mammography applications contracted by approximately 20%. Export sales revenue from imaging software solutions were also strong and materially contributed toward export sales growth. The companies imaging software solutions include ‘Econsole1’ for human and veterinary applications, ‘Rconsole’ for mammography solutions as well as ‘Truview’ a general image processing solution.

The marginal increase in domestic sales revenue was driven by materially weaker sales from indirect and direct FPDs which were offset by strong demand for mammography products. Domestic revenues from the sale of indirect and direct FPDs experienced a significant contraction and were approximately 1/3 lower YoY. The growth in domestic sales revenue from the sale of mammography solutions counterbalanced this contraction, resulting in overall domestic sales revenue growth of 1% YoY. The growth from mammography solutions was led by the ‘RoseM’ series of detectors which are the companies premium brand of breast imaging detectors originally launched in 2016.

Overall, the balance of increasing sales revenue and increasing production volumes resulted in a marginal increase in the average price of FPDs. The average price for all products increased by 1% YoY reaching 15.2 million won, although there were significant changes at an individual product level depending on the detector application and underlying technology.

DRTECH continues to invest in research and development activities and R&D expenses increased on both a nominal and relative basis, reaching 15% of net sales revenue. The company also increased its investment in BIOTHLON, Inc through acquiring an additional 50,000 preference shares, taking its total investment to 4.4 billion won. The investment into BIOTHLON, the US-originated genetic analyzer development and manufacturing company, seeks to enable DRTECH to apply its detector technology within the Next Generation Sequencing (NGS) business. DNA analysis and protein analysis using NGS technology is a new concept research method that facilitates the analysis and treatment of various diseases including cancer. The company is seeking to diversify it’s product portfolio as well as expand by offering high value-adding products into a growing biotechnology market.

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