Rayence Q3 2019 Sales Results

Image credit: Rayence booth RSNA 2017, Rayence US

Rayence Corporation, the Korean listed manufacturer of x-ray detectors published its third-quarter results during November. Its Group consolidated financial statements indicate that sales continued to grow during the third quarter following a slower start to the year. On a calendar year basis, cumulative sales revenue reached ₩93.1 billion, compared with ₩88.9 billion in 2018, an increase of +4.7% year-on-year.

Sales growth was driven by domestic demand from Vatech

The sales growth year-to-date has been driven by customers based domestically, which accounted for approximately 54% of sales revenue during the first nine months of 2019. The majority of these domestic sales were to Vatech Corporation, the companies original parent. Rayence was spun-out from Vatech’s digital radiography division during 2011 and remains the companies largest shareholder as well as it’s largest domestic customer. The segmentation between export and domestic sales in the Rayence results, therefore, is slightly misleading as a significant proportion of its domestic detector sales to Vatech will end up being exported globally under the Vatech brand.

Sales results by product category

From a product mix perspective, the sales growth during the first nine months of 2019 has been driven by higher demand for the companies EZ series of bendable intra-oral (I/O) sensors using CMOS technology. The cumulative sales revenue from I/O sensors reached approximately ₩15.7 billion, compared with ₩9.5 billion in 2018, an increase of approximately +65% year-on-year. Higher sales revenue from I/O sensors were partially offset by lower sale revenue from both TFT and CMOS x-ray detectors. Sales growth for TFT detectors was approximately -9% year-on-year and -5% for CMOS detectors, relative to the same period in 2018.

Higher sales from Latin America driven by digitalisation

The company does not report on sales revenue by geography within its quarterly reports, however, its financial accounts do include trade receivables and internal sales between its international subsidiaries. These can provide some indication around sales and trade activity by major geographical region. These indicate that sales originating from OSKO Inc and it’s Mexican counterpart OSKO MEX SADE CV, increased significantly. These subsidiaries were acquired by Rayence during 2016 and provide sales and distribution to the Latin America region. The increase in sales was driven by higher demand for TFT detectors as the healthcare industry continues to transition from analogue to digital x-ray solutions. This digitalisation trend is anticipated to continue as well as support demand for its TFT detectors in other regions including Africa and Asia.

Production volumes and pricing

For the first nine months of 2019, the company reported total production of 22,858 detector units, compared with 21,317 units in 2018, an increase of approximately +7% year-on-year. This increase was due to increased production of TFT-based detectors and I/O sensors which combined accounted for approximately 65% of the total production volumes. The higher production of TFT and I/O detectors was partially offset by lower production volumes of CMOS detectors which contracted by approximately -20%, relative to 2018. The increase in production volumes translated into both higher sales volume as well as higher product inventories which increase by approximately ₩1.2 billion or +4% year-on-year. The company reports on annual price trends by major product category. During 2018, the average selling price (ASP) of TFT detectors decreased by approximately -10% and increased by approximately +14% for CMOS detectors, relative to 2017. During 2018, the ASP of I/O sensors increased by approximately +3%, relative to 2017. The price trends for 2019 by product category are expected to be reported within its annual results in 2020.

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