LOTTE (004990) Q2 2024 earnings summary

Executive summary

• Achieved highest quarterly revenue driven by overseas expansion in the F&B division, with consolidated revenue up 6.2% year-over-year and operating profit up 3.7% year-over-year.

• Net profit turned negative due to significant equity method losses and non-operating items, despite operational improvements in core businesses.

Financial highlights

• Consolidated 2Q24 revenue: 4,108bn KRW (+6.2% YoY); operating profit: 165bn KRW (+3.7% YoY); net profit: -147bn KRW (down from 58bn KRW in 2Q23).

• 1H24 revenue: 7,846bn KRW (+7.2% YoY); operating profit: 235bn KRW (-1.3% YoY); net profit: -166bn KRW (down from 122bn KRW in 1H23).

• F&B segment revenue up 15.5% YoY, operating profit up 22.4% YoY; Retail revenue down 6.6% YoY, operating profit turned negative.

• Gross margin improved to 30.8% in 2Q24 from 30.3% in 2Q23.

Outlook and guidance

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

• Major investments planned in biologics, including 4.6 trillion KRW in Songdo Bio Campus by 2030.