Lotte Holdings and Chemical Subsidiary Executives Voluntarily Return Part of Salaries... In the Spirit of Responsible Management

Poor Performance Due to Global Recession and Economic Downturn
Subsidiaries Implement Emergency Management System, Voluntary Retirement Applications

Executives of Lotte Corporation, Lotte Chemical, and Lotte Fine Chemical, among other chemical group affiliates, will voluntarily return a portion of their salaries starting this month as part of responsible management. Lotte Corporation is operating under an emergency management system to proactively respond to the global economic downturn, while the Lotte chemical group is experiencing poor performance due to a prolonged industry recession.

According to the business community and the distribution and chemical industries on the 11th, executives at Lotte Corporation will return 20-30% of their salaries starting this month, while executives at Lotte chemical group affiliates will return 10-30% of their salaries. It has not been decided how many months the voluntary salary returns will continue.

This voluntary salary return is known to be a measure to demonstrate the management's determination, including Chairman Shin Dong-bin, to take the lead in overcoming difficult conditions amid the petrochemical industry's recession and increasing domestic and international uncertainties.

On the 7th, Lotte Chemical announced that its consolidated operating loss for the third quarter of this year was preliminarily estimated at 413.6 billion KRW, turning to a deficit compared to an operating profit of 42.6 billion KRW in the same period last year. Sales increased by 5.6% to 5.2002 trillion KRW compared to the same period last year.

Lotte Fine Chemical's consolidated sales for the third quarter of this year were 420.4 billion KRW, up 4.8%, but operating profit was preliminarily estimated at 10.3 billion KRW, down 70.7% from the same period last year.

Lotte is striving to strengthen its core business competitiveness by proactively responding to changes in the management environment. Among its affiliates, Lotte Duty Free, which is experiencing poor business conditions, entered emergency management in June, and Lotte Chemical followed in July.

Lotte Corporation also switched to an emergency management system in August to strengthen cooperation by increasing support for the management activities of each affiliate amid uncertain management conditions.

To improve workforce efficiency, Lotte On (June), Lotte Duty Free (August), and Seven Eleven (October) have implemented voluntary retirement programs, and Lotte Hotel & Resort is accepting applications until the 22nd of this month.