Lotte Wellfood's 2Q Operating Profit Falls 46% on Cost Pressures... Overseas Markets Like India Show Resilience

Operating Profit at 34.3 Billion Won, Down 45.8% Year-on-Year
Steady Overseas Sales Growth in India, Kazakhstan, and Other Markets

Lotte Wellfood experienced a disappointing performance in the second quarter of this year, with its operating profit dropping by nearly 50%. Profitability deteriorated due to the burden of rising prices for key raw materials such as cacao, but sales growth was achieved thanks to the performance of overseas subsidiaries.

According to the Financial Supervisory Service's electronic disclosure system on August 5, Lotte Wellfood's consolidated operating profit for the second quarter was provisionally tallied at 34.3 billion won, down 45.8% from the same period last year. During the same period, sales amounted to 1.0643 trillion won, up 1.9% year-on-year, while net profit for the quarter was 15.7 billion won, a decrease of 61.5%.

For the first half of the year, Lotte Wellfood's operating profit was 50.7 billion won, which represents a 49.6% drop compared to the same period last year. Sales for the same period reached 2.0394 trillion won, an increase of 2.2% year-on-year.

It is assessed that the growth in sales was offset by overseas expansion. The domestic subsidiary saw a slight decrease in sales of 0.6% in the first half, affected by sluggish consumer demand and unfavorable weather conditions. In contrast, overseas subsidiaries recorded an 11.2% increase in sales, driven by price hikes and growth in markets such as India, Kazakhstan, and Russia.

The main reason for the decline in operating profit was the increased burden of raw material costs, especially cacao. Lotte Wellfood also explained that one-off expenses incurred to improve productivity had an impact.

A Lotte Wellfood representative stated, "In the second half of the year, we expect sales growth due to revitalized consumption and favorable weather during the peak season. As cacao prices have stabilized, we also anticipate a reduction in cost pressures. We plan to improve sales and profits by focusing on core products and expanding our high-margin portfolio, and global sales growth will continue."

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