Lotte Chilsung's operating profit in the third quarter was 57 billion won... Beverage and overseas sales decreased by 37.9% (comprehensive)

Lotte Chilsung Beverage [005300] announced on the 9th that its consolidated operating profit in the third quarter of this year was 57 billion won, a 37.9% decrease from the same period last year.

Sales were KRW 1.0501 trillion, a 2.7% decrease compared to the same period last year, and net profit was KRW 40.5 billion, a 34.6% decrease.

The beverage division's separate sales in the third quarter amounted to 513.3 billion won, a 4.7% decrease from the same period last year. Operating profit decreased by 47.4% to 29 billion won.

Due to sluggish domestic consumption and intensifying competition in the beverage market, sales decreased across all product lines, including carbonated drinks, coffee, and sports drinks.

The increase in cost burden due to the rise in raw material prices also affected profitability.

Separate sales of the liquor division in the third quarter were KRW 198.2 billion, a 2.5% increase from the same period last year, and operating profit was KRW 17.2 billion, a 24.1% increase.

In particular, ready-to-drink liquor (RTD) sales increased by 119.6% compared to the same period last year.

Lotte Chilsung Beverage reorganized its fruit soda brand into 'Sunhari Jin' early this year and expanded its product line to include yuzu, sangria, and unsweetened green lemon.

Soju sales increased by 2.2% thanks to the refurbishment of ‘Cheoreomlike’ and sales growth of ‘Saero’. Sales of Cheongju also increased by 1.9% due to strong sales of ‘Restoration One Cup’, a low-dose product.

The third quarter sales of the global division, which includes the performance of overseas subsidiaries such as the Philippines, Pakistan, and Myanmar, were KRW 380.6 billion, down 0.9% from the same period last year.

Operating profit decreased by 48.1% to 10.7 billion won. Rising raw material prices and the burden of logistics costs were cited as the main causes of worsening profitability.

Lotte Chilsung Beverage also lowered its annual performance forecast for this year.

The annual sales forecast was lowered by 20 billion won to 4.08 trillion won, and the operating profit forecast was lowered by 15 billion won to 185 billion won.

Compared to last year's performance, sales increased by 2.7% and operating profit increased by 10.7%.

Lotte Chilsung Beverage established an Innovation Task Force (TF) in September this year to strengthen the competitiveness of its domestic business and improve its profit structure, and plans to focus on cost efficiency and improvement of profitability in the future.

An official from Lotte Chilsung Beverage said, “The profitability of the beverage and global business has decreased due to the prolonged consumption slump, raw material prices, and the burden of global logistics costs,” and added, “In the alcoholic beverage sector, both sales and operating profit have improved based on the high growth of the RTD category.”