"Saeroga Hyoja" Lotte Chilsung, 3Q Operating Profit 84.3 Billion KRW... Up 12.3% YoY (Comprehensive)

Sales Grow 5.9% to 830.4 Billion Won
Zero-Sugar Soju 'Saero' Leads Performance

Lotte Chilsung Beverage's zero-sugar soju 'Saero' continued its rapid growth, driving the company's third-quarter earnings growth. Lotte Chilsung plans to sustain this momentum by diversifying the Saero product line and implementing aggressive marketing, while also breaking the slump in its beer business with the launch of a new beer product, 'Cloud,' later this month.

Lotte Chilsung Beverage announced on the 2nd through a public disclosure that its consolidated operating profit for the third quarter of this year was tentatively estimated at 84.3 billion KRW, a 12.3% increase compared to the same period last year. During the same period, sales rose 5.9% to 830.4 billion KRW, and net profit increased by 45.2% to 67.8 billion KRW.

Looking at the business segments, the beverage business recorded standalone sales of 567.9 billion KRW, growing 5.7% year-on-year, while operating profit decreased by 2.8% to 62.2 billion KRW. Sales of energy drinks (24.3 billion KRW) and sports drinks (27.1 billion KRW) grew by 42.0% and 10.9%, respectively, compared to the same period last year. In contrast, juice (39.8 billion KRW) and tea (11.2 billion KRW) sales declined by 1.6% and 5.3%, respectively. Domestic sales totaled 530.7 billion KRW, up 4.6%, and exports increased by 26.4% to 34.1 billion KRW.

Inflation, prolonged rainy seasons, and heavy rains worsened the overall operating environment for beverage products. The continuous rise in raw material costs such as sugar, oranges, and coffee, along with high exchange rates and interest expenses, is interpreted as limiting earnings growth. However, the trend toward health and functional beverages steadily continued, contributing to sales growth in related product lines.

The alcoholic beverage business posted sales of 201.1 billion KRW, a 4.3% increase from the same period last year, and operating profit surged 110.2% from 6.7 billion KRW to 14.0 billion KRW. Soju sales led the performance improvement with 84.0 billion KRW, up 28.2%, and the RTD (Ready To Drink) category (4.7 billion KRW), though small in scale, also supported growth with a 98.4% increase. On the other hand, beer sales fell 26.6% to 20.3 billion KRW, and sales of spirits such as whiskey (7.7 billion KRW) and wine (19.7 billion KRW) declined by 13.2% and 9.2%, respectively.

In the alcoholic beverage segment, the zero-sugar soju 'Saero' continues to receive a positive response. Saero's sales, which were around 2.5 billion KRW in its first quarter after launch in the third quarter of last year, surged to 32.7 billion KRW this quarter. Market share, which was about 3.3% at the end of last year, increased by 8.5% this quarter, and thanks to Saero's strong performance, the overall soju market share rose to around 21%. Lotte Chilsung plans to continue aggressive marketing by introducing a 400mL PET bottle product in the fourth quarter and expanding the brand universe.

Meanwhile, the beer business will attempt to overcome its slump with the launch of a new 'Cloud' product on the 21st of this month. Lotte Chilsung plans to introduce a new product with an alcohol content of 4.5%, under the concept of a "refreshing and crisp lager."

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