Seoul: Lotte Chilsung Beverage Co. announced Monday that its second-quarter net profit surged nearly 32 percent compared to the previous year, propelled by increased exports of its key products. The company reported a net profit of 27.7 billion won (approximately US$20 million) for the April-June period, marking a 31.6 percent increase year-on-year, as stated in a regulatory filing.
According to Yonhap News Agency, the company's operating profit for the second quarter experienced a modest rise of 3.5 percent from the previous year, reaching 62.4 billion won. However, sales witnessed a slight decline of 1.1 percent, totaling 1.08 trillion won. The earnings figures did not meet market expectations, as analysts had projected a net profit average of 31.5 billion won, based on a survey by Yonhap Infomax, the financial data division of Yonhap News Agency.
The breakdown by sector revealed that the non-alcoholic beverage division faced a 33.2 percent drop in operating profit to 23.7 billion won, attributed to rising raw material costs, notably for orange and coffee. Additionally, sales of products such as soda, coffee, mineral water, and sports drinks decreased amid a continued downturn in domestic consumption. Nonetheless, the company's energy drink sales increased by 4.8 percent during the quarter, reflecting an expanded product portfolio.
Lotte Chilsung Beverage's exports of beverage products rose by 6.7 percent during this period, primarily driven by soda and coffee. In contrast, the alcoholic beverage division experienced an 8.2 percent decline in operating profit year-on-year for the second quarter, settling at 2.9 billion won. The company stated its commitment to enhancing profitability in its global operations and plans to increase production capacity to bolster its competitive edge.
Lotte Chilsung Beverage's shares ended the trading session at 134,800 won, marking a 3.45 percent increase from the previous day's close, outperforming the broader KOSPI index's 0.91 percent gain. The second-quarter financial results were disclosed during market hours.