Lotte Chilsung Surpasses 4 Trillion Won in Sales for the First Time Last Year... Profitability Declines

Sales Reach 4.0245 Trillion Won, Up 24.8% Year-on-Year
Operating Profit Down 12.2% to 184.9 Billion Won... Beverage Division Sluggish

Lotte Chilsung Beverage surpassed annual sales of 4 trillion won for the first time in history last year. However, due to sluggish domestic beverage business, operating profit declined, causing profitability to retreat.

Lotte Chilsung announced on the 10th through a public disclosure that its consolidated operating profit last year was tentatively estimated at 184.9 billion won, down 12.2% compared to the same period last year. During the same period, sales increased by 24.8% to 4.0245 trillion won. Operating profit in the fourth quarter of last year rose 15.6% year-on-year to 9.2 billion won, and sales increased by 0.5% to 923.3 billion won.

Looking at each business segment, the beverage division recorded sales of 1.9097 trillion won, down 2.2% from the previous year. Operating profit decreased by 35.7% (57.9 billion won) to 104.2 billion won compared to the previous year. The operating environment worsened due to a slowdown in domestic consumption, sudden cold weather, and unstable weather conditions, and increased raw material costs such as sugar, orange, and coffee led to declines in the carbonated, coffee, bottled water, and juice categories.

The liquor division posted cumulative sales of 813.4 billion won, up 1.2% from the previous year, and operating profit grew 3.4% year-on-year to 34.7 billion won. Despite economic recession and high inflation caused by domestic and external factors that dampened consumer sentiment, the soju segment, centered on ‘Saero’, showed growth. During the same period, the beer business grew by 2.3%, and the RTD (ready to drink) product category increased by 7.8%.

Sales in the global division nearly tripled to 1.2456 trillion won compared to the previous year. Operating profit also rose 135.1% (23.5 billion won) year-on-year to 41 billion won. In particular, the representative overseas subsidiary, the Philippines corporation (PCPPI), succeeded in turning a profit in the fourth quarter due to improved operating conditions.