Hotel Shilla (008770) investor relations material

Executive summary

• Revenue grew 8.4% year-over-year in 1Q 2026, reaching KRW 1,053.5 billion, with operating profit turning positive at KRW 20.4 billion after a loss in the prior year.

• Operates in two main segments: Travel Retail and Hotel & Leisure, with global presence in major airports and cities.

• Net profit attributable to owners was KRW 6.0 billion, a turnaround from losses in prior periods.

• Both travel retail and hotel & leisure segments contributed to the turnaround, with significant profit recovery.

• The company is actively restructuring and focusing on cost reduction and portfolio diversification amid ongoing industry challenges.

Financial highlights

• Consolidated revenue: KRW 1,053.5 billion, up 8.4% YoY; operating profit: KRW 20.4 billion, compared to a loss of -2.5 billion KRW in 1Q25.

• Net profit: KRW 6.0 billion (compared to a net loss of KRW 172.8 billion in Q1 FY2025).

• Travel retail revenue: KRW 889.3 billion; operating profit: KRW 12.2 billion (turned positive YoY).

• Hotel & leisure revenue: KRW 180.3 billion; operating profit: KRW 8.2 billion (+228.0% YoY).

• EBITDA margin improved to 5.1% in 1Q26 from 3.8% in 2025.

Outlook and guidance

• Korean duty-free industry remains at 50% of pre-pandemic levels, with slow recovery due to reduced Chinese tourist spending and unfavorable exchange rates.

• Travel retail segment will focus on profitability recovery amid changing market conditions.

• Hotel & leisure segment aims to maintain strong performance by flexibly responding to customer demand and is experiencing rapid post-pandemic recovery.

• Company is pursuing restructuring, cost control, and diversification to improve profitability.