Lotte Rental announced on the 11th that it recorded consolidated sales of 731.3 billion KRW and operating profit of 71.6 billion KRW for the fourth quarter of 2024. This represents an 11.6% increase in sales and a 34.7% increase in operating profit compared to the same period last year. It achieved the highest sales and operating profit ever recorded for a fourth quarter.
Since the third quarter of 2023, Lotte Rental has been reducing used car sales and promoting a business structure improvement focused on its core operations according to its new growth strategy. The temporary profit and loss decline caused by shifting the business model from used car sales to rentals has ended, and the company is evaluated to have entered a full-fledged growth phase starting from the fourth quarter of last year. With improved profit generation from its core business, the proportion of rental profit in annual operating profit surpassed 50% for the first time since the company’s founding.
In the fourth quarter, sales and operating profit from the auto long-term rental (new and used cars) business increased by 7.9% and 118.4%, respectively, compared to the same period last year.
Sales of auto short-term rentals showed particularly high growth of 15.5% in the Jeju region, and operating profit increased by 72% compared to the same period last year. Especially, the increase in inbound foreign rental transactions compared to the previous year raised expectations for growth in the highly profitable short-term rental business.
In the used car sales business, sales and operating profit increased by 31.1% and 7.1%, respectively, compared to the same period last year. A Lotte Rental official explained, "After the peak season in the third quarter, we strategically disposed of short-term rental cars with reduced utility value and Lotte Rental G Car vehicles, temporarily increasing the number of cars sold."
Lotte Rental also introduced a B2C used car sales service, which it regards as a new growth engine. After a pilot operation period in November last year, the service was launched in December of the same year. From March onward, the company plans to actively expand the B2C used car sales business along with the unveiling of a new brand. Additionally, starting with the sales center in Gayang-dong, Gangseo-gu, Seoul, established in November last year, a Bucheon sales center is also being prepared.
Along with the earnings announcement, Lotte Rental confirmed a dividend of 1,200 KRW per share for 2024. The company completed the repurchase and cancellation of approximately 10 billion KRW worth of treasury shares last year, and with the confirmed dividend for 2024, it achieved a shareholder return ratio exceeding 40% of annual net income.
Choi Jin-hwan, CEO of Lotte Rental, stated, "Although 2024 is a period for settling new business models, we achieved solid results and improved fundamental profit-generating capabilities. Despite internal and external environmental changes, we will further stabilize and complete the business strategies developed over the past two years to become the absolute No.1 player in the mobility industry."
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