Lotte Reports 181% Increase in Q1 Operating Profit Amid Business Restructuring

Lotte Holdings held an investor relations (IR) meeting to discuss its improved first-quarter performance and portfolio restructuring strategy. The company aims to enhance profitability in its core businesses while strengthening financial stability through the sale of non-core assets and the optimization of low-profit operations.

On May 28, Lotte Holdings announced that over 30 analysts and institutional investors attended the IR meeting held on May 27. Key executives from Lotte Holdings, including the CFO, as well as finance and IR officials from major subsidiaries such as Lotte Shopping, Lotte Construction, and Lotte Chemical, participated in the event.

Lotte reported that its operating profit from core sectors, including food, retail, chemicals, and hotels, surged 181% year-on-year to 787.6 billion won in the first quarter.

Lotte Shopping experienced a 71% increase in operating profit, reaching 252.9 billion won, driven by growth in its domestic and international department stores.

Lotte Construction's operating profit soared 1,226% to 50.4 billion won. Lotte Wellfood and Hotel Lotte also reported operating profits of 35.8 billion won and 74.5 billion won, respectively.

Lotte Chemical achieved a turnaround to profitability in operating profit for the first time in ten quarters, aided by improved spreads due to the Middle East conflict, lagging effects, and optimized factory operations.

The company also shared updates on its portfolio restructuring focused on non-core businesses and asset efficiency. Since 2024, Lotte has initiated the sale of its Jeungpyeong plant, the consolidation of Lotte Chilsung Beverage branches, and the divestiture of Lotte Chemical's Pakistan subsidiary and Lotte Eco Wall to secure liquidity.

This year, Lotte plans to continue restructuring low-efficiency operations, including the sale of Lotte Rental and the reorganization of Lotte Chemical's Daesan and Yeosu plants. Additionally, it outlined investment strategies for new businesses in sectors such as biotechnology, battery and semiconductor materials, and hydrogen.

Lotte Biologics is set to complete the construction of its first plant at the Songdo campus in the second half of this year. Following the completion, the company plans to expand its global operations based on a production system connecting Syracuse, USA, and Songdo, Incheon.

Lotte Energy Materials is adjusting its production focus from electric vehicle battery foil to energy storage system (ESS) batteries and AI circuit boards.

Lotte Holdings stated, "We will work to secure financial stability and enhance corporate value through the reduction of project financing (PF) contingent liabilities at Lotte Construction and efficient investment execution within EBITDA."

Meanwhile, Shin Dong-bin, chairman of Lotte Group, visited Hanoi, Vietnam, last month for his first overseas management visit of the year. During his visit to Lotte Mall Westlake Hanoi, he urged, "While strengthening the market competitiveness of existing core businesses, please also focus on pioneering new businesses in advanced urban construction, eco-friendly materials, and logistics."