LOTTE (004990) Q4 2024 earnings summary

Executive summary

• Annual revenue reached a record high of KRW 15,757 billion in 2024, up 3.9% year-over-year, driven by overseas subsidiary consolidation, but operating profit fell 31% to KRW 341 billion due to higher raw material costs and restructuring.

• Net profit turned negative at KRW -946 billion for 2024, impacted by equity method losses and impairment charges.

Financial highlights

• 4Q 2024 consolidated revenue was KRW 3,768 billion, down 1.8% year-over-year; operating loss was KRW 73 billion, compared to a profit of KRW 15 billion in 4Q 2023.

• F&B segment annual revenue rose 10.2% to KRW 9,174 billion, but operating profit dropped 6.2% to KRW 382 billion due to rising cocoa prices and one-off expenses.

• Retail (Korea Seven) annual revenue fell 6.4% to KRW 5,328 billion, with an operating loss of KRW 78 billion, affected by restructuring and weak consumer demand.

• Chemical and Shopping affiliates posted significant equity method losses, with Chemical reporting a net loss of KRW 1,121 billion in 4Q 2024.

Outlook and guidance

• Focus on four new growth themes: Bio & Wellness, Mobility, Sustainability, and New Life Platform, including expansion in biologics, EV infrastructure, and eco-friendly materials.

• Biologics business expanding with new US and Songdo facilities, aiming for GMP readiness by 2027.

• Retail enhancement project underway to optimize store portfolio and improve profitability.