[Edaily Reporter Shin Ha-yeon ] H-City ( HCT(072990)), a company specializing in testing, certification, and calibration, posted an operating loss in the second quarter of this year due to factors such as adjustments to the volume of information and communications technology (ICT) testing. The company plans to work toward a recovery in performance in the second half of the year, driven by a rebound in testing volume, the launch of new testing infrastructure, and improved profitability at its overseas subsidiaries.

HCT announced on the 14th that it posted consolidated revenue of 25.6 billion won and an operating loss of 400 million won in the second quarter of this year. Revenue increased slightly from the previous quarter’s 24.7 billion won but decreased by 12.2% year-over-year, while operating profit turned to a loss. Cumulative revenue for the first half of the year was 50.3 billion won, and operating profit was at the break-even point (BEP).

In the second quarter, the company was affected by fluctuations in test volumes in its core business of testing and certification for information and communications technology (ICT) products. While revenue from testing major ICT products was concentrated in the second quarter of last year, revenue this year decreased year-over-year as test volumes from some clients were adjusted and project completion dates were pushed back to the second half of the year.

The company expects testing volumes from major clients to increase in the second half compared to the first half, and anticipates that revenue from ongoing ICT testing projects will be recognized sequentially. It plans to strengthen its support for major clients while also pursuing new testing demand and securing new clients.

New testing infrastructure has also entered full-scale operation. In May, HCT completed construction of the “M Solution Center,” the largest automotive electronics electromagnetic compatibility (EMC) testing facility in Korea, and began providing testing services. Operating a total of nine automotive electronics EMC chambers—including six high-voltage EMC chambers—the company aims to expand revenue from mobility testing and certification.

Overseas, the U.S. subsidiary has shown improved profitability. After completing the expansion of its test chambers and facilities earlier this year, the U.S. subsidiary expanded its operations and returned to profitability in the second quarter. The company also noted that its Indonesian subsidiary is maintaining stable performance based on the expansion of its calibration business.

In the bio business, the company completed the merger between HNH Bio and Humic, a firm specializing in preclinical efficacy evaluations, and has begun integrated operations. The company plans to provide integrated services linking toxicity testing and efficacy evaluations while improving its competitiveness in securing orders and its profit structure through streamlined organizational and facility operations. The company expects the bio business division to reach break-even point (BEP) this year.

An HCT official stated, “In the first half of the year, revenue and profitability from ICT testing and certification fell short of expectations due to a combination of fluctuating testing demand among clients and schedule adjustments for some projects. However, the U.S. subsidiary returned to quarterly profitability following its expansion, and the M Solution Center has begun full-scale operations, indicating that the business foundations we proactively established are now entering a profit-generating phase.”

The official continued, “In the second half of the year, we expect a recovery in some ICT testing volumes and the recognition of revenue from ongoing projects,” adding, “We will focus on improving performance by responding to key clients, securing new demand, increasing the utilization rate of new testing facilities, and expanding the profitability of our overseas subsidiaries.”