Sales Drop 3% to 910.3 Billion Won
Both Beverage and Liquor Divisions See Decline
Lotte Chilsung Beverage posted disappointing results in the first quarter of this year, as profitability declined due to the dual challenges of a sluggish domestic market and rising costs.
On May 7, Lotte Chilsung Beverage announced in a regulatory filing that, on a consolidated basis, its operating profit for the first quarter of this year was provisionally tallied at 25 billion won, down 31.9% from the same period last year. During the same period, sales fell by 2.8% to 910.3 billion won, while net profit decreased by 66.4% to 5.4 billion won.
By segment, the beverage division recorded sales of 408.2 billion won, down 5.4%, and operating profit of 13 billion won, down 45.6%. These results were due to a slowdown in domestic consumption, increased raw material costs for items such as sugar, oranges, and coffee, and a deteriorating external environment caused by a strong exchange rate. However, thanks to rising consumer demand, sales of energy drinks increased by 11.3%, and beverage exports?including products like Milkis and aloe juice?rose by 7.0%.
The liquor division saw sales decrease by 10.2% to 192.9 billion won, but operating profit increased by 12.0% to 14.2 billion won. Ongoing domestic and international uncertainties, combined with economic recession and high inflation, led to weakened consumer sentiment and a decline in sales across all domestic segments of the liquor business. However, liquor exports increased by 5.3%, led by the Sunhari brand in the US and European markets.
The global division posted sales of 340.5 billion won, up 9.4%, but operating profit dropped by 74.2% to 600 million won. Among overseas subsidiaries, the Philippine subsidiary (PCPPI) saw sales rise by 5.4% to 254.2 billion won, while recording an operating loss of 3.3 billion won.
This year, Lotte Chilsung plans to introduce the new "Chilsung Cider Zero" in the beverage business, in line with the zero-calorie trend, and to renew "Soonhari Lemonjin" and "Chum-Churum" in the liquor business during the first half of the year. In the global business, the company will focus on improving subsidiary profitability and expanding production capacity to meet demand in emerging markets. In addition, Lotte Chilsung intends to strengthen cooperation with global partners and pursue the globalization of its brands.
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