**Kolong, despite the operating profit increasing in the first quarter of 2026, net losses continue**

Cologne significantly increased operating profit in the first quarter of 2026, restoring a profitability trend, but net losses are still continuing. Improved profitability at major subsidiaries supported overall performance, but one-time assessment losses put pressure on net profit.

According to the consolidated financial statement performance announced by Cologne Co., Ltd. on the 15th, first-quarter revenue was 1.5188 trillion won and operating profit was 98.8 billion won. Compared with the same period last year, revenue increased by 7.7% and operating profit increased by 158.3%. Net loss for the period was 44.7 billion won; the losses are still ongoing. However, compared with the previous quarter, operating profit increased by 187.6 billion won, turning a loss into a profit, and the net loss amount also decreased by about 154.7 billion won. From the surface, this appears to be a profit improvement performance that is more significant than revenue growth. This is not simply because sales increased; it can be seen as a reflection of improvements in business operating efficiency and cost management.

The core of the improvement in performance lies in major subsidiaries and their affiliates. Cologne Industrial, a subsidiary accounted for using the equity method, benefited from operational efficiency initiatives and steady sales expansion in industrial materials and chemical segments, achieving double growth in both revenue and operating profit despite external uncertainties. This means that even when the company is affected by variables such as raw material price fluctuations, economic slowdown, and changes in global demand, it has persisted by improving productivity and optimizing product structure. The company plans to continue pushing operational efficiency activities in the manufacturing sector in the future, increase the proportion of high-yield, high value-added products, and maintain a profit-centered growth strategy.

Subsidiaries in the construction and distribution sectors also defended their profitability successfully, each in its own way. Cologne Global saw a slight decline in revenue due to the completion of low-yield residential projects, but it significantly increased operating profit by strengthening on-site management and improving cost ratios. In the construction industry, compared with the order volume itself, it becomes more important to determine what structure is used to secure projects and how much profit margin can be achieved. Cologne Global is believed to have focused on revenue management through a so-called “selective order-taking” strategy. In fact, new orders received in the first quarter were 404.4 billion won, up 19% from the same period last year, and the company plans to continue ensuring high-quality projects going forward.

Cologne Mobility Group recorded growth in both revenue and operating profit due to strong sales momentum for high-end imported cars. However, regarding net profit for the period, losses occurred because the rise in the stock price of Cologne Engineering led to an expansion of derivative valuation losses related to convertible bonds. Rather than being due to weak performance in its main business sales, this is closer to the impact of financial valuation factors being reflected in accounting gains and losses. The company plans to strengthen its service infrastructure, expand its certified used car business, and upgrade its product mix into a business structure that provides a profit foundation beyond simply selling products. In the future, this trend may lead Cologne to further reinforce profit-oriented operations rather than expanding scale.