"Lotte Wellfood's 1Q Operating Profit Up 36.5% on 'Confectionery and Overseas Profitability Improvement' (Comprehensive)"

Lotte Wellfood (formerly Lotte Confectionery), which absorbed and merged Lotte Foods, recorded nearly 1 trillion KRW in sales this first quarter as profitability improved in the confectionery and overseas businesses.

On the 3rd, Lotte Wellfood announced through an investor relations (IR) presentation that first-quarter sales this year reached 959.6 billion KRW, a 4.1% increase compared to 921.9 billion KRW, which was the combined sales of Lotte Confectionery and Lotte Foods during the same period last year. Operating profit for the same period rose 36.5% year-on-year to 18.6 billion KRW.

Lotte Confectionery absorbed and merged Lotte Foods on July 1 last year and changed its company name from Lotte Confectionery to Lotte Wellfood on the 1st of last month.

By segment, overseas business sales increased by 18.8% to 190.9 billion KRW, and operating profit rose 74.8% to 8.9 billion KRW. Lotte Wellfood explained that business expanded in India and the Commonwealth of Independent States (CIS) region due to production line expansion, and profitability improved reflecting the effect of price increases.

The confectionery business recorded sales of 410.4 billion KRW, up 4.6% year-on-year, and operating profit of 15.8 billion KRW, up 77.7%. Lotte Wellfood explained that it defended profitability by offsetting sales declines from reduced SKUs of ice cream products and sales efficiency improvements with expansion in high-margin categories such as gum and chocolate.

Food business sales increased 1.9% to 367.1 billion KRW, but due to cost burdens, it posted an operating loss of 2.9 billion KRW, turning to a deficit. Regarding this, the company explained that while cost burdens in the B2C sector were absorbed through price improvements in processed meat and HMR (home meal replacement), profits decreased compared to the previous year due to cost burdens from milk fat caused by a decline in raw milk prices.

Meanwhile, Lotte Wellfood had earlier disclosed that first-quarter sales and operating profit increased by 89.7% and 72.9%, respectively, compared to the same period last year, but these figures were based on Lotte Confectionery’s performance before the merger with Lotte Foods.

This content was produced with the assistance of AI translation services.