Lotte Chilsung Beverage Q1 Operating Profit Jumps 91% on Milkis, Saero Growth

Lotte Chilsung Beverage said its first-quarter operating profit surged 91% from a year earlier, as beverage exports and overseas subsidiaries expanded despite weak domestic demand and pressure from a strong exchange rate. Growth in soju and ready-to-drink products also supported results in its liquor business.

The company said Monday that first-quarter operating profit on a consolidated basis totaled 47.8 billion won, up 91% from the same period a year earlier. Revenue rose 4.6% to 952.5 billion won.

In beverages, revenue increased 1.5% to 414.2 billion won, while operating profit climbed 62% to 21.1 billion won. The company cited a tougher external environment and higher business costs, but said sales rose across most major categories, including carbonated drinks, juice, coffee, energy drinks, sparkling water and sports drinks.

Energy drink sales rose 8.7% from a year earlier, and sports drink sales increased 11.5%.

Beverage exports also grew. Sales of products including Milkis, Let’s Be and aloe juice increased in more than 50 countries, including the United States, Russia, Europe and Southeast Asia, lifting export performance 13.4% from a year earlier.

In the liquor business, revenue rose 0.7% to 194.2 billion won and operating profit increased 9.6% to 15.6 billion won. The company said consumer sentiment weakened amid Middle East-driven geopolitical risks, high inflation and shifting drinking trends, but soju, cheongju and RTD products supported performance.

Soju sales rose 2.6%, led by Saero, which underwent its first renewal since launch. Cheongju sales increased 2.7% as demand for smaller-size alcoholic beverages grew, with Subok One Cup driving gains. RTD sales jumped 74.4% on rising interest in fruit-flavored sparkling alcoholic drinks and an expanded lineup.

Growth was also strong in the global segment, which includes overseas subsidiaries in the Philippines, Pakistan and Myanmar. First-quarter revenue in the segment rose 11.1% to 378.3 billion won, and operating profit increased by 13.7 billion won to 14.3 billion won. The global segment’s share of total revenue expanded to about 46%.

Lotte Chilsung Beverage said it will continue focusing this year on improving profitability at its overseas subsidiaries. It also plans to expand production capacity to strengthen competitiveness in fast-growing emerging markets and meet rising global demand for products including Milkis, Let’s Be, Saero and Soonhari. A company official said it will keep prioritizing profitability to raise corporate value and build a foundation for sustainable growth.

Separately, Chief Executive Officer Park Yoon-ki said at the company’s 59th annual shareholders meeting in March that it would pursue management efficiency, restructure its domestic business portfolio and strengthen overseas operations to meet its business plan, while moving ahead with mid- to long-term strategies for future growth.