Lotte Chilsung Beverage (005300) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated sales rose 38.1% year-over-year to 10,992 billion KRW, with 1H 2024 sales up 38.0% to 20,361 billion KRW.

• Operating profit for Q2 increased 1.8% to 602 billion KRW, but 1H operating profit declined 18.1% to 970 billion KRW.

• Net profit dropped 36.1% year-over-year in Q2 to 211 billion KRW, and 41.3% in 1H to 372 billion KRW.

• Beverage segment led with 1,598.3 billion KRW in sales (78.5% of total), while liquor contributed 437.8 billion KRW (21.5%).

• Net income attributable to controlling interests was 36.9 billion KRW, with EPS of 3,670 KRW for common shares.

Financial highlights

• Gross profit margin in Q2 decreased to 35.5% from 40.3% a year ago.

• SG&A expenses rose 25.8% year-over-year in Q2.

• Debt to equity ratio increased to 180.7% as of June 30, 2024.

• Borrowings to total equity ratio stood at 103.8%.

• Dividend payout for 2023 was 3,400 KRW per common share and 3,405 KRW per preferred share.

Outlook and guidance

• Forward-looking statements note potential impact from political, economic, and social uncertainties.

• Zero-calorie and health-oriented beverages and liquors are expected to drive future growth.

• Expansion in overseas markets, especially North America, is a key focus.

• Continued investment in ESG and sustainability initiatives, including RE100 and packaging innovation.