LOTTE (004990) Q3 2024 earnings summary

Executive summary

• Achieved record-high quarterly revenue of KRW 4,143 billion in 3Q 2024, up 3.5% year-over-year, but operating profit declined 25.9% to KRW 179 billion due to weaker subsidiary performance and higher raw material costs.

• Net profit turned negative at KRW -222 billion in 3Q 2024, compared to KRW 149 billion in 3Q 2023, mainly due to equity method losses and decreased profitability in key segments.

• Consolidated revenue for the nine months ended September 30, 2024, was KRW 11,989 billion, with operating profit of KRW 414 billion and net loss of KRW -1,872 billion.

• The group’s main business segments include retail, chemicals, food, and beverages, with significant contributions from major subsidiaries.

• The period ended with a consolidated net loss of KRW 187.1 billion, compared to a net profit of KRW 163.7 billion in the prior year, mainly due to increased financial costs and equity method losses.

Financial highlights

• Consolidated revenue rose 3.5% year-over-year to KRW 4,143 billion in 3Q 2024; operating profit fell 25.9% to KRW 179 billion.

• Year-to-date (1-3Q) revenue increased 5.9% to KRW 11,989 billion, but operating profit dropped 13.7% to KRW 414 billion; net profit turned negative at KRW -1,872 billion.

• Net loss attributable to owners was KRW 296.2 billion, reversing from a profit of KRW 163.7 billion in the same period last year.

• Debt ratio improved to 134.6% from 139.4% year-over-year; consolidated debt-to-equity ratio was 133.8% as of September 30, 2024.

• Cash and cash equivalents at period-end were KRW 1,170 billion, down from KRW 1,580 billion at the previous year-end.

Outlook and guidance

• Focus on new growth themes: Bio & Wellness, Mobility, Sustainability, and New Life Platform.

• Major investments planned in biologics, including USD 3 billion for Songdo Bio Campus by 2030 and $80 million for North American ADC facility.

• The group continues to focus on strengthening core business segments, expanding overseas, and investing in new growth areas such as bio and health care.

• Management is committed to maintaining stable dividends and financial discipline, with a target payout ratio of at least 30% of standalone net income.