Good afternoon. This is CFO Se-hun Yang from d'Alba Global. Thank you for taking your time today. This is scheduled to be a one-hour session. About 35 minutes will be spent to go through the slides in our corporate homepage, dalbaglobal.com, and the rest, 25 minutes, will be spent for the Q&A. Please be noted that the results being presented today are prepared before the external audit was completed and may change during the auditing process. Our forecast and executive information may also vary with market conditions and strategy adjustments. Furthermore, ahead of the Q&A session, we kindly ask for your understanding that we cannot share any non-public material information such as recent monthly performance. Please refer to page three.
In the second quarter, we achieved record high quarterly revenue of KRW 128.4 billion, which is $93.5 million with 74% year-over-year growth, and a 13% quarter-over-quarter increase. Our operating profit margin, OPM, was recorded at 22.8%, totaling KRW 29.2 billion. Notably, overseas sales for the first half of 2025 reached $105 million, already surpassing the total overseas sales of $97 million of FY 2024. As seen in the left graph of this slide, in the first half of 2025, total sales have reached $176 million, marking a 73% year-over-year increase, while total operating profit rose to $43.2 million, which is an 83% year-over-year increase with a solid OPM of about 25%.
On the right side, you'll note that this quarter recorded the record high quarterly sales, highest ever overseas sales proportion of 63%, 34 consecutive quarters of year-over-year sales growth, and the highest OPM of 25% for this first half. Please refer to page four. The COGS ratio for the second quarter was 22.5%, which is down 2.1 percentage point from the first quarter. Meanwhile, the SG&A ratio increased by 5.8 percentage point to 54.8%. In the lower part of the table, the marketing expenses and other SG&A costs increased compared to first quarter. Usually, we're seeing higher marketing expenses ratio in second quarter comparing to first quarter during recent years, and this 18.3% of marketing expenses ratio is still lower than last second quarter's 19.0% and FY 2024's 21.0%.
Regarding other SG&A costs of 9.5%, which is higher than last quarter's 7.2%, this has been affected by IPO fee and additional VAT payments from regular tax audit of National Tax Service, and these two are non-recurring expenses. Also, there are notable items in the memo on the right side of the table. First one is a delayed recognition of a B2B order from Russia, which has a sales impact of approximately $4.4 million. The second one is additional VAT payment from regular tax audits. Combining these two, operating profit impact is around $3.6 million. This Russian B2B order amounts have been fully recognized already in this third quarter sales. Consequently, this first half OPM is 25%, which is higher than 19.4% of FY 2024, and this is based on structural improvements. We believe that this enhancement trend is going to continue long-term via increased B2B sales proportion.
Please refer to page five. In summary, the year-over-year growth rate for our second quarter and first quarter of this year significantly outpaced the same period of year-over-year growth rates in the previous two years' average, reflecting an accelerating growth curve. d'Alba's quarterly year-over-year growth pattern has been quite consistent. For example, it was 39% year-over-year growth for first quarter of 2023, and 35% in first quarter of 2024, and about 71% of year-over-year growth in second quarter 2023, and 45% in second quarter of 2024. This year, our first quarter and second quarter year-over-year revenue growth surpassed past two years' average level. The primary drivers of this growth acceleration include our three principles for overseas expansion. Firstly, avoiding vendor dependency and directly operate overseas business. Second, online-first strategy. And third, foreign national employee-based sales operation.
Regarding OPM, first quarter and second quarter OPM also exceeded year-over-year quarterly average OPMs in 2022, 2023, and 2024. Please refer to page six. In our recent IR sessions, we have highlighted three key growth drivers. First, acceleration of online channel growth, second, offline expansion, and third, the localized brand campaigns. I would like to explain these aspects quantitatively. On the left side, regarding online channels, in each region, our top online sales channels have seen significant growth in monthly average sales compared to the second half of 2024 due to three factors. First, effective local marketing, second, active promotion participation, and third, premium branding. What we would like to highlight is, unlike most of other K-beauty brands, our quite balanced sales structure across major online channels within Russia and Japan.
In Japan, Qoo10, Rakuten, and Amazon, each channel is generating monthly revenue over KRW 1 billion during non-season months. In Russia, Ozon and Wildberries are also generating monthly revenue over KRW 1 billion during non-season, and Lamoda is also reaching to that level since its launch in last October. Regarding offline channels, we currently have about 3,200 overseas offline stores as of first half 2025 and aim to exceed 5,000 by the year-end. In a previous IPO session, right after our IPO, we stated that we are conservatively targeting 2,000 stores in Japan by the year-end. But with new entry into 800 Matsumoto Kiyoshi stores into second quarter, we have already exceeded 2,800 stores and now are targeting 4,000 by year-end. The third growth driver is localized brand campaign.
In this April, we had a global brand trip in Lake Como in Italy, in which we invited influencers from Europe, Russia, United States, Japan, and Korea. And this event helped us in significantly boosting our brand recognition and led to many viral contents in TikTok and Instagram. In Japan, we enhanced our premium positioning with a brand trip in collaboration with Bvlgari Hotel Tokyo in May, inviting top local influencers. In Russia, we solidified brand positioning through collaboration with Irina Shayk for a sunscreen product line. In North America, we did a L.A. pop-up event with Harper's Bazaar and Hapa Kristin store in June, which attracted over 3,000 visitors, reflecting successful brand engagement. Please refer to page seven. Domestic sales grew year-over-year by 14%, but they were relatively lower compared to the 149% rise in overseas sales, with notable growth in Europe, Pan China, and Japan.
Domestically, second quarter QOQ, which is the second quarter's revenue growth over first quarter, was -6%. Historically, our sales trends tend to be weakened in second quarter and third quarter. In 2023 and 2024, our second quarter QOQ was around -7% in average, and in the third quarter in that years, QOQ was around -20% in average. Typically, the performance rebounds strongly in fourth quarter, QOQ over 40%-60% growth over the third quarter in 2024 and 2023. We expect similar patterns this year. Among six regions, Japan became the region with the highest overseas sales in the first half, showing both substantial scale and improvement in growth rate and profit margin, anticipated to surpass KRW 100 billion in sales for this year. YOY growth for second quarter was approximately 364%, and for the first half was about 314%.
In Russia, second quarter recorded a QOQ growth of 74% and YOY of 38%, with the YOY being relatively lower due to the KRW 6 billion or $4.4 million shipment delay mentioned earlier. Other regions showed robust growth in second quarter, with North America at 140% YOY, Europe at 520%, ASEAN at 120%, Pan China at 190%, and other regions at 120%, all indicating healthy and over two times growth from the previous year. Other regions include CIS, Australia, India, the Middle East, and Latin America. Please refer to page eight. All six overseas regions maintain significant growth momentum, with an overall YOY growth of 170% for the first half.
In the FY 2024, Russia had the highest overseas revenue proportion of 28%, but as of the first half of this year, Japan leads with 33%, followed by Russia at 20%, North America at 15%, ASEAN at 17%, Europe at 7%, and Greater China at 7%, indicating balanced growth across these six regions. Stage 2 regions, such as Japan, Russia, and ASEAN, are generating meaningful online sales with high operating margins over 25% in the first half. Currently, average offline sales proportion in these Stage 2 regions is about 20%. We expect gradual increase in offline proportions, which will favorably impact OPM for upcoming periods. Stage 1 regions for the first half. Europe exhibited a remarkable 598% YOY growth, North America at 100%, Pan China at 325%, showing substantial increases.
Especially Europe and North America are expected to contribute further to sales growth as we begin offline expansions into major global retail channels in the second half of this year. Please refer to page nine. In the second quarter, domestic sales grew by 14% YOY, and for the first half, they rose by 13% with Coupang and Olive Young driving growth with YOY growth of 39% and 83% respectively. The H&B and other segments, primarily led by Olive Young, recorded its first half total sales reaching almost 80% of its whole year sales in 2024. In the table on the right, online sales through platforms like Naver, Kakao, and Home Shopping showed minus YOY trends. We're planning to rebound the growth through the expansion of new SKUs such as beauty devices, gift sets, and lip volumizers in online and through launching new mist lineups in the Home Shopping channel.
Please refer to page 10. Japan sales grew by 366% in second quarter, significantly surpassing the 270% YOY growth of first quarter. The first half saw a YOY growth of 315% driven by the diversified growth across online channels centered around Qoo10, Rakuten, and Amazon, as well as local offline channel expansion like Matsumoto Kiyoshi. On the right side of the slide, in the online channel section, you can observe Japan's top three online channels, Qoo10, Rakuten, and Amazon exceeded on average monthly sales ballpark of KRW 1 billion with an average YOY growth of 230% for the half year. Campaigns with top celebrities like Miyoshi Ayaka, active content marketing with local influencers, and unique offline campaigns such as collaborations with Bvlgari Hotel Tokyo, have strengthened our brand positioning in Japan, contributing to continuous growth.
In the second quarter, Qoo10 had new SKU expansions like Green Tone-Up Sunscreens and Vita Trio products, which helped the brand earn the third place in second quarter Mega Sale among beauty brands. We also did second place in the mist sales, achieving the second place in Mega Sale for the beauty device category, and this reflects significant interest and support from local customers. In Amazon, we were ranked seventh in the beauty category, while the Rakuten Super Sale saw mist sales achieving the first position, indicating smooth sailing across other online channels. Offline channels showed over 600% growth YOY, and we aim to expand the number of stores from the current 2,800 to over 4,000 by the year-end. Currently, we're discussing with not only variety shops and drugstores, but also high-end channels such as department stores. Please refer to page 11.
North America's second quarter YOY growth was about 140%. That is significantly exceeding first quarter's YOY growth of 66%. As of the first half, it recorded a YOY growth of 100%, driven by the robust sales performance synergy between Amazon and TikTok Shop. Active customer engagement in Instagram and TikTok with the upgraded performance marketing capabilities and influencer network expansion. Those all helped our robust growth in North American market. In the graph on the left, Canada grew from under 10% of U.S. sales in first quarter to 12% in second quarter, showing faster growth than United States. On the right side, in the online section, Amazon and TikTok Shop led expansion with YOY growth of 73% and 470% respectively. In Amazon, our First Spray Serum was ranked 51st in the United States and 15th in Canada of the beauty category during July Prime.
Though it was temporarily listed down due to a false claim a week before the Prime. Such false claims are often related to counterfeit product reports and product safety issues. Typically, they get missed within two to five business days. Regarding offline, we're actively discussing with major retail chains like Costco, Ulta, Target, and Holt Renfrew in Canada, and those are progressing well. Holt Renfrew is one of the most well-known luxury department as well, and we're expecting to enter in this second half like other U.S. channels mentioned. Each channels will have different SKU composition in order to avoid potential cannibalization. Costco will be featuring large milliliter products, such as duo sets of 180 milliliter instead of 100 milliliter First Spray Serum. For Ulta , it will be highlighting wide-spectrum SKUs, and we're currently discussing 7 SKUs to enter offline.
For Target, we're in discussions with smaller millimeter products, such as 50-millimeter first product, with about five SKUs to enter offline. Regarding marketing, in June, we launched our first North American branded campaign with a pop-up event at the Hapa Kristin store in Los Angeles. The TikTok Shop Glow Challenge in the second quarter was also highly successful, expanding our SNS content network to nano and micro-influencers. For the second half of this year, we're planning additional branded campaigns in key cities like Miami, New York, and Los Angeles. Please refer to page 12. Europe achieved 508% year-over-year growth in the second quarter, and 598% increase for the first half of this year. Most of the revenue is currently generated from Amazon, but actively looking to expand to other online and offline channels.
The revenue breakdown for Europe in the first half is approximately 30% Germany, 30% Spain, 10% U.K., 10% Italy, and 20% from other countries such as France, Poland, and other parts of Europe's B2B markets. We attribute Europe's high growth to three main factors. Firstly, increasing local hiring to activate influencer collaborations with local talents in Germany, Spain, U.K., and Italy. Secondly, establishing localized contents. Thirdly, internalizing and enhancing performance marketing capabilities. On the right side of the slide, regarding online front, Amazon sales grew 770% year-over-year, with our presence continuing strongly in the second quarter. In Amazon Prime, our First Spray Serum was ranked first place in Spain and sixth place for toner, and third place in Germany and 38th place in Italy of the beauty category, and we have the top spot for the mist category across Europe, maintaining a solid momentum.
Regarding offline, cost for offline contract for Spain and France have been finalized, and revenue expected to generate in the second half. We're also in ongoing negotiation with Super-Pharm in Poland and Israel, with over 200 stores for each country, and Sephora, Bell, Rossmann, dm, Clarel, and other drugstore chains throughout Europe. Please refer to page 13. In the second quarter, Russia achieved 38% year-over-year growth and a 78% increase for the first half. While second quarter year-over-year appears lower than 358% year-over-year in the first quarter, this is primarily impacted by the deferred order of approximately $4.4 million from B2B channel. For reference, in the second quarter, Gold Apple's Russian revenue proportion was below 60%, while other major online channels, excluding Gold Apple, grew about 280% year-over-year.
Regarding online channels on the right side, Ozon, Wildberries, and Lamoda continue to generate most of the online sales, centered around our hero products, Vita Eye Patch and First Spray Serum. Both channels have surpassed monthly sales ballpark of KRW 1 billion. Ozon and Wildberries have achieved monthly sales of over KRW 1 billion, and Lamoda, launched in the fourth quarter last year, is progressing steadily towards the same milestone. Additionally, five newly developing online channels, such as Yandex Market, are growing healthily and quickly, supporting balanced long-term growth. Regarding offline, growth remains stable. We plan to expand from the current 47 stores by about 10 additional stores by year-end, further penetrating online channels, and Gold Apple's hero product, the Vita Eye Patch, remains the top-selling product across the entire Gold Apple channel, confirming its strong position.
In the second half, we expect the launch of the Vita Eye Patch with enhanced whitening and radiance features to accelerate growth in the Russian market. Please refer to page 14. ASEAN achieved 120% YOY growth in the second quarter and 123% for the first half of this year. While Shopee remains our primary sales channel, TikTok Shop, which is being established in several key countries in this year, is synergizing with Shopee and contributing to rapid growth. In the second half, we plan to strengthen our sales base through offline store expansions, such as Watsons and Sephora. Although ASEAN's second quarter sales declined by 15% compared to the first quarter, this is historical seasonal pattern in d'Alba's ASEAN business because last year's second quarter also saw about 10% decrease from the first quarter. This is because of big sales events typically scheduled in the first quarter.
Given the second quarter YOY growth is 120%, which is almost similar to that of this first quarter's YOY 130%, we believe ASEAN is making steady and healthy growth, and we also believe this will continue in the second half of this year. On the left graph, the revenue proportion by countries is approximately 35% Vietnam, 25% Indonesia, 20% Malaysia, 10% Philippines, with the remaining 10% split between Singapore and Thailand. On the right side, regarding online performance, ASEAN's overall online sales increased by 132% YOY in the first half. Also, first half online sales YOY growth by countries was Indonesia 96%, Vietnam 35%, Malaysia 1,300%, Thailand 521%, and Singapore 344%. Notably, in Vietnam Shopee, we are ranked second place in the top skincare brand list by sales.
In Malaysia and Philippines Shopee, our mist was ranked first and second in each country for the skincare category during the 6.6 Double Day promotion. Notably, in Malaysia, our collaborations with local celebrities like Nora Danish went big viral, helping to achieve Malaysia's second quarter QOQ revenue growth of 105%. In this second half, we plan to continue active branding campaigns featuring local celebrities and influencers, including collaborations with Indonesian top-level pop star Rossa. In offline channels, we opened 95 new stores in Indonesia Sociolla in the second quarter, resulting in significant YOY growth. For the second half, we are working on new store openings with Sephora in Singapore, as well as Watsons stores in Malaysia, Singapore, and the Philippines. For Sephora Malaysia, we actually started selling our product from a week ago. Please refer to page 14.
Pan China achieved approximately 190% YOY growth in the second quarter and 325% for the first half of the year. The left graph shows that the region already exceeded last year's full-year sales in the first half. Sales are concentrated mainly on two online channels, Douyin and Tmall, with the majority coming from China and Taiwan in a ratio of approximately nine to one. On the online side, China sales increased by 364% YOY and Taiwan's by 122%. Influencers and celebrities like Chaolu and Nana are collaborating with d'Alba, significantly boosting brand recognition. The newly launched products, Purple Sunscreen and Aromatic Mist, have received positive feedback and continued sales growth. During the 18th June shopping festival on Douyin and Tmall, our sunscreen product was ranked sixth place in Douyin sunscreen brand category, and our mist product ranked 86th in the Tmall product category, gradually climbing the top charts.
Given the significant market potential in China, our strategy for this year focuses on solidifying key product and brand positioning in the online channel instead of rushing to expand offline. Please refer to page 16. In the post-IPO IR discussions, we introduced three keywords for the growth strategy. First, global, second, adjacent new business, and third, high-value SKUs. We believe that we're making healthy progress across these areas. On the left side, regarding our global operations, these emerging region sales have already reached KRW 2.2 billion in the first half. Notably, Indian sales, which used to be around KRW 100 million per month last quarter, are growing rapidly at over 20% MOM, approaching to KRW 200 million monthly in the second quarter. The Middle East opened up in this June via Amazon and has already ranked within the top 100 in the beauty category.
Latin America has completed new hiring and expects sales to start from next year. Other regions include Australia and the CIS countries, such as Ukraine, Kazakhstan, Uzbekistan, Turkey. Regarding the adjacent new businesses, devices, color cosmetics, and hair and body products have grown 93%, 169%, and 7% respectively. Again, beauty devices YOY growth 93%, color cosmetics 169%, hair and body products 7% YOY growth in this second quarter. Those are happening based on positive customer feedback, and particularly the dual head skincare device, beauty device, which completes the care just in two minutes, has been well-received overseas, ranking second in beauty device at two tents event in June. In the second half, we plan to expand into North America and other global markets.
Regarding high-value SKUs on the right side, our d'Alba Signature brand product lines began launching in this quarter, with three products introduced in the second quarter. Notably, the Vita Capsule Collagen Hydrogel Mask in eight shapes was ranked in the top 10 in the beauty category at Olive Young. Although still in the early stages, this product has received a very positive response. Please refer to page 17 for the sales breakdown by product. The proportion of mist sales decreased from 51% in first quarter to 42% in second quarter. In the last second quarter, mist accounted for approximately 51% in 2024. Conversely, the sunscreen segment, which was 22% in second quarter last year, increased to 27% in second quarter this year. Additionally, the remaining categories excluding mist and sunscreen rose significantly from around 23% in second quarter last year to 31% in second quarter this year.
Among them, beauty devices nearly doubled their sales compared to the previous quarter. The beauty care sector, which is comprised of makeup, perfume, hair, and body products, grew approximately 78% compared to last first quarter this year. Please refer to the last page 18. This summarizes our financial statements. Due to healthy quarterly net income generation and the issuance of new shares upon IPO, total assets increased by 74% from KRW 136 billion at the end of 2024 to KRW 237 billion. Total equity rose by 85% from KRW 102 billion last year to KRW 189 billion. On the right side, the income statement shows that for the first half, our sales reached KRW 2,242 billion. Operating profit was KRW 59.3 billion, and net income amounted to KRW 44.6 billion. This concludes our presentation of the financial results.
Thank you very much for your attentive listening, now we'll be proceeding to Q&A session.
Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone. The first question will be provided by Jun Choi from Macquarie Securities. Please go ahead with your question.
Hi. Thanks for the opportunity. I want to ask you to clarify the magnitude of the one-off cost, especially the VAT tax audit process related cost. Second is, what was the reason behind the delay in the shipment toward Russia? Thank you.
Thank you very much. Please give us some time, and we'll be referred. Okay, thank you for waiting. Firstly, regarding your first question, especially regarding one-off costs, due to our confidentiality agreements between National Tax Service, we cannot share the detail unfortunately. However, in that total operating profit impact amount of KRW 5 billion introduced in the fourth page, it is not major. It does not exceed the 50% of that total amount. It is not major amounts, but unfortunately, we cannot share the exact amount at this moment. Regarding the shipment delay, regarding Russian B2B order, it's more like a daily cut-off. We were expecting that to happen in the last half of June, but it did not happen in the last half June. After June 30th, when it happened, it's not second quarter anymore, it's third quarter.
That's what we can explain at this moment. Thank you. Next question, please.
The following question will be presented by Jun Choi from Macquarie Securities. Please go ahead with your question.
Yeah. Is KRW 5 billion on the operating profit a combined impact from tax and Russia event, or just solely on the tax event?
Combined.
Thank you.
Next question, please.
Currently, there are no participants with questions. Please press star one, star and one to give your question.
Okay, we'll be spending two more minutes until 6:15 P.M. If there is no question, then we will finish this English second quarter results call. Now the time is 6:15. We will finish this second quarter earnings call. Thank you very much for taking your time today. Thank you.