Lotte Chilsung Beverage (005300) Q4 2023 earnings summary

Executive summary

• FY23 consolidated sales rose 13.5% YoY to KRW 32,247 hundred million; operating profit fell 5.5% to KRW 2,107 hundred million, while net profit increased 27.0% to KRW 1,665 hundred million.

• Q4 sales surged 37.3% YoY to KRW 9,184 hundred million, but operating profit declined 67.3% to KRW 80 hundred million.

Financial highlights

• Q4 consolidated gross profit was KRW 3,040 hundred million, up 17.9% YoY; SG&A rose 26.7% to KRW 2,961 hundred million.

• Q4 consolidated profit before tax increased to KRW 353 hundred million from KRW 27 hundred million; net profit rose to KRW 353 hundred million from KRW 58 hundred million.

• FY23 consolidated operating margin was 6.5%, down 1.3 percentage points YoY; net margin was 5.2%, up 0.6 percentage points.

Outlook and guidance

• FY24 consolidated sales guidance is KRW 42,000 hundred million and operating profit KRW 2,500 hundred million; targeted operating margin is 6.0%, down 0.5 percentage points from FY23.

• Beverage guidance: sales KRW 20,200 hundred million (+3.4%), operating profit KRW 1,800 hundred million (+11.1%), and margin 8.9% (+0.6 percentage points).

• Liquor guidance: sales KRW 8,500 hundred million (+5.7%), operating profit KRW 400 hundred million (+19.0%), and margin 4.7% (+0.5 percentage points).

• 2024 priorities include growth through health/lifestyle trends and global expansion, plus profitability actions in budgeting, promotion and pricing, supply chain, and cash flow.