Lotte Wellfood Reports Q2 Operating Profit of 64.7 Billion Won, Up 89% Year-on-Year

Performance Recovery Driven by Global Business Growth and Management Efficiency

Lotte Wellfood announced on August 7 that its consolidated sales for the second quarter of this year (April to June) reached 1.1557 trillion won and operating profit was 64.7 billion won, reflecting year-on-year increases of 8.6% and 89%, respectively. The operating margin was 5.6%. Net income for the current quarter was 36.1 billion won, up 130.1% compared to the same period last year.

Lotte Wellfood explained that, despite a challenging external environment—including heightened uncertainty due to global geopolitical instability and the ongoing burden of key raw material costs—it has continued to show a recovery in performance. The company highlighted that growth in its global business and the pursuit of management efficiency drove this recovery.

Domestic sales for the second quarter were 859.8 billion won, a 3.3% increase from the same period last year. Operating profit came to 38.4 billion won, up 50.2% year-on-year. By business segment, second-quarter sales for confectionery reached 276.0 billion won (up 5.2%), ice cream 193.1 billion won (up 6.2%), fats and oils 131.4 billion won (up 6.3%), and food service ingredients and related items 58.2 billion won (up 3.4%).

Lotte Wellfood explained that, in the domestic market, it responded to increased uncertainty due to war and mounting cost burdens by focusing on marketing activities around its core brands to enhance competitiveness. The company rolled out major brand marketing campaigns such as the KBO collaboration with brands like Pepero and Xylitol, the second installment of Kancho name marketing, and first-half World Cone marketing. The early arrival of hot weather also had a positive impact on sales in the ice cream segment.

For the second quarter, overseas subsidiaries recorded sales of 311.2 billion won and operating profit of 29.6 billion won, increases of 28% and 133% respectively compared to the previous year. Growth in major markets such as India and Kazakhstan was key to the strong performance. In India, the expansion of operations at the Pune ice cream plant enabled increased supply during peak season, while the steady growth of Lotte Choco Pie contributed to the results in the confectionery division. In Kazakhstan, growth was fueled by both local sales and expanded exports.

Despite increased costs for key raw materials such as packaging and raw milk, as well as the impact of a strong exchange rate, Lotte Wellfood achieved improved profitability in the second quarter. The company continued efforts to rationalize low-efficiency SKUs and sales channels while streamlining logistics and purchasing processes.

Cumulative sales for the first half of the year were 2.1831 trillion won, and operating profit was 100.5 billion won, marking year-on-year increases of 7% and 98%, respectively. The operating margin for the first half was 4.6%.

Lotte Wellfood expects that challenges arising from uncertainty—such as volatility in cocoa bean prices due to abnormal weather and the ongoing effects of conflict in the Middle East—will persist. In key overseas operations like India and Kazakhstan, the company plans to sustain growth by introducing and expanding the distribution of local Lotte brands. For exports, it will strengthen marketing efforts linked to K-culture and accelerate entry into major distribution channels in each country. Domestically, the focus will remain on management efficiency improvements and leveraging core brands to capitalize on seasonal trends.

A Lotte Wellfood representative said, "Although uncertainty is expected to persist in the second half of the year, we will continue to pursue solid, profitability-driven growth by expanding into global mainstream channels, focusing on core brand trends, and continuously strengthening our fundamental competitiveness."

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