Lotte Chilsung Beverage continued its revenue growth in the second quarter, driven by strong performance in its alcohol and overseas businesses, despite facing external uncertainties. However, ongoing pressures from raw material costs and logistics expenses led to a decline in operating profit.
The company reported a consolidated operating profit of 55.8 billion won and revenue of 1.1129 trillion won for the second quarter, marking a 10.4% decrease in operating profit and a 2.4% increase in revenue compared to the same period last year.
For the first half of the year, Lotte Chilsung recorded an operating profit of 103.6 billion won and revenue of 2.0654 trillion won, representing increases of 18.6% and 3.4%, respectively, from the previous year.
While profitability in the beverage sector slightly declined, strong sales in key categories contributed to overall growth. The beverage division reported a separate operating profit of 20.5 billion won and revenue of 500.5 billion won in the second quarter, with operating profit down 13.2% and revenue up 1.7%.
Sales of sports drinks surged by 8.5% due to early summer heat and increased demand for health beverages. Carbonated drinks benefited from the zero-calorie trend and seasonal effects, growing by 3.1%, while ready-to-drink (RTD) coffee saw a 4.1% increase thanks to market growth and new product launches.
Beverage exports also rose by 9.8% year-on-year, driven by strong sales of Milkis, Let's Be, and aloe juice in over 50 countries, including the United States, Russia, Europe, and Southeast Asia.
The alcohol segment led the performance improvement, with a separate operating profit of 7.5 billion won and revenue of 195.1 billion won in the second quarter, reflecting increases of 156.6% and 3.2%, respectively. For the first half, operating profit in the alcohol sector reached 23 billion won, up 34.5%.
Notably, the growth of RTD products was significant. Following the renewal and expansion of the 'Suhari Jin' product line, RTD sales skyrocketed from 4.4 billion won last year to 10.6 billion won this year, a 143.3% increase. Sales of soju brands 'Cheoeumcheoreom' and 'Saero' rose by 1.9%, while demand for lower-alcohol products increased soju sales by 1.8%, and wine sales grew by 8.8% due to expanded distribution channels.
Although the global segment continued to grow, profitability declined. The global division, including overseas subsidiaries, reported second-quarter revenue of 458.5 billion won, a 3.4% increase, while operating profit fell by 27.0% to 26.1 billion won. The company attributed this decline to rising raw material and logistics costs. However, the combined share of global subsidiaries and exports expanded to approximately 47% of total revenue.
Lotte Chilsung plans to minimize material cost burdens and focus on improving fixed cost efficiency through expanded sales networks in the second half of the year. The company aims to achieve consolidated revenue of 4.1 trillion won and an operating profit of 200 billion won for the year.
A company representative stated, "The second quarter faced challenges in profitability due to rising raw material and logistics costs, but we maintained revenue growth through the expansion of our alcohol business, RTD products, and increased beverage exports. We will establish a stable growth foundation through the development of global brands and a focus on profitability improvement."
* This article has been translated by AI.
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