Lotte Chilsung Beverage's headquarters in Jamsil, Seoul [Lotte Chilsung Beverage]
Lotte Chilsung Beverage's headquarters in Jamsil, Seoul [Lotte Chilsung Beverage]

Lotte Chilsung Beverage reported Wednesday that its second-quarter operating profit fell 10.4 percent from a year earlier to 55.8 billion won ($39.1 million). Sales rose 2.4 percent to 1.11 trillion won, while net profit edged up 1.8 percent to 28.2 billion won.

The beverage segment posted operating profit of 20.5 billion won, down 13.2 percent year on year, as sales grew 1.7 percent to 500.5 billion won. Weak domestic consumption, a high exchange rate, and rising raw material and logistics costs tied to the conflict in the Middle East weighed on profitability.

The liquor segment recorded growth, with sales climbing 3.2 percent to 195.1 billion won and operating profit surging 156.6 percent to 7.5 billion won. Ready-to-drink products led the expansion — RTD sales jumped 143.3 percent year on year as the company broadened its lineup around Sunhari Jin to include yuzu and sangria varieties while stepping up marketing. Soju sales rose 1.9 percent, supported by an expanded lineup for Chum Churum and continued growth of Saero.

The global segment posted second-quarter sales of 458.5 billion won, up 3.4 percent from a year earlier, including results from overseas subsidiaries in the Philippines, Pakistan and Myanmar. Operating profit, however, fell 27.0 percent to 26.1 billion won.

"In the second quarter, worsening external conditions — including high inflation, rising raw material prices and elevated global logistics costs — created profitability challenges," a company official said. "But we were able to sustain sales growth thanks to the liquor business, the expansion of the RTD category and growth in beverage exports. Going forward, we plan to focus our efforts on strengthening our core competitiveness and building a stable foundation for growth."


siuu@heraldcorp.com