Vieworks, Q3 2019, Sales Results

Vieworks Co., Ltd, the Korean originated manufacturer of x-ray imaging detectors, published it’s latest quarterly results during November. These results indicate that sales activity slowed during the third quarter, resulting in a moderate contraction in quarterly revenues relative to Q3 2018. During the third quarter of 2019 sales revenue reached ₩ 32.5 billion, compared with ₩ 33.8 billion in 2018, a decrease of approximately -4% year-on-year. Despite this recent slowdown, overall sales revenue remains higher for the year and on a cumulative basis, sales reached ₩ 97.1 billion, compared with ₩ 93.8 billion in 2018, an increase of approximately +3.5% year-on-year.

Sales growth was driven by medical imaging exports

For the first nine months of 2019, the growth in sales revenue was driven by the medical imaging solutions business unit which grew by approximately 17% year-on-year and accounted for approximately 2/3 of Group revenues. The majority of these sales were to customers based internationally within its core export markets which include the United States, Europe, China and Japan; although domestic sales performed strongly also. While geographical segmentation of its customer base is not provided within its quarterly financial results, the settlement statements from its subsidiaries can provide some indication to the territories driving sales growth. This data indicates that the United States remains the companies largest market, in terms of revenue contribution, with distribution through its subsidiaries MedLink Imaging and Vieworks America. The U.S. remains a strategically important market for the company both in terms of x-ray detector as well as software sales. As of writing, Vieworks is currently exhibiting its latest detectors for the U.S. market at RSNA 2019, which includes its TFT based VIVIX-S V and VIVIX-M series of detectors for digital radiography and digital mammography imaging solutions. From a product perspective, revenue from the sale of both TFT-based detectors for digital radiography as well as CCD-type detectors angiography grew strongly. In contrast to the medical imaging business, the industrial imaging business unit experienced a moderate contraction in sales activity due to weaker demand for its industrial camera products. During the first nine months of 2019, revenue from the sale of industrial imaging products accounted for approximately 1/3 of total sales revenue.

Production volumes and pricing

The production capacity of detectors at its facility in Anyang-si, remained stable for both medical and industrial imaging, relative to 2018. For the first nine months of 2019, the company reported an overall production capacity of 23,520 units, compared with 23,220 units in 2018, a marginal increase of approximately 1%. In terms of production volumes, the production of detectors for medical imaging applications significantly increased which was more than offset by lower production of detectors for industrial imaging applications. The company reported overall production volumes of 13,235 units, compared with 14,738 units in 2018, a decrease of approximately -10% year-on-year. At an overall portfolio level, the company reported that the average selling price of its detectors increased marginally by approximately 1% year-on-year, relative to 2018. At first glance, for medical imaging detectors specifically, these reported price fluctuations appear to contradict the recent mix of production volumes increasing faster than sales revenue, which implies some price further erosion. A large proportion of the higher production volumes, relative to sales, is the build-up of product inventory which is significantly higher relative to 2018.

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