Q3 consolidated sales reach 1.1 trillion won; operating profit hits 89.9 billion won

India, Kazakhstan subsidiaries drive high growth abroad

An outdoor advertisement for Lotte Wellfood's Pepero collaboration with K-pop group Stray Kids at LA Koreatown Plaza [Lotte Wellfood]
An outdoor advertisement for Lotte Wellfood's Pepero collaboration with K-pop group Stray Kids at LA Koreatown Plaza [Lotte Wellfood]

Lotte Wellfood said Wednesday its third-quarter consolidated operating profit rose 29.7 percent year-on-year to 89.9 billion won ($66.9 million), while sales grew 1.5 percent to 1.17 trillion won on a preliminary basis.

For the first three quarters combined, sales reached 3.36 trillion won and operating profit came in at 190.4 billion won, up 5.0 percent and 58.7 percent, respectively, from the same period a year earlier. The operating profit margin stood at 7.7 percent for the third quarter and 5.7 percent on a nine-month cumulative basis.

Overseas operations drove the earnings improvement. Strong growth at subsidiaries in India and Kazakhstan offset a decline in domestic sales that resulted from the company's shift toward profitability-focused efficiency in the home market.

Third-quarter overseas subsidiary sales rose 16.1 percent year-on-year to 271 billion won, while operating profit more than doubled — surging 137.8 percent — to 23.1 billion won. On a nine-month cumulative basis, overseas sales reached 852.7 billion won and operating profit 64.7 billion won, up 20.5 percent and 105.4 percent, respectively.

In the domestic market, the company worked to strengthen its core competitiveness through operational efficiency. It reinforced its focus on key brands despite a contraction in the ice cream market caused by unfavorable weather. To counter rising costs for packaging materials, crude oil and other key raw materials amid global geopolitical uncertainty, the company rationalized low-efficiency product lines and sales channels while improving productivity to bolster profitability.

Lotte Wellfood said it plans to sustain its growth momentum by strengthening competitiveness in global markets and targeting emerging domestic sales channels.

On the global front, the company will continue investing in key growth markets and expanding its presence in mainstream retail channels. In India, it will focus on stabilizing the fourth Choco Pie production line and expanding ice cream quick-commerce. In Kazakhstan, Russia and other major markets, it plans to broaden its product portfolio and grow local distribution channels alongside marketing tied to the Korean Wave.

Domestically, the company is actively targeting peak-season demand around Pepero Day in the fourth quarter. It also plans to sharpen its strategy for emerging channels such as warehouse discount stores and lifestyle product retailers, while continuing efforts to improve its overall profitability profile.

"Strengthening our core competitiveness through ongoing business restructuring, combined with the strong performance of our overseas subsidiaries in India and Kazakhstan, drove our third-quarter results," a Lotte Wellfood official said. "We will continue pursuing quality growth by reinforcing our domestic profitability strategy and expanding our presence in global markets."


spa@heraldcorp.com