Lotte Wellfood (280360.KS) posted strong second-quarter results, driven by overseas business growth and management efficiency. Despite external headwinds including rising raw material prices, a high exchange rate, and geopolitical instability, growth at key overseas hubs such as India and Kazakhstan led the improvement in profitability.
Lotte Wellfood reported second-quarter consolidated revenue of 1.1557 trillion won and operating profit of 64.7 billion won, the company said on the 7th. Revenue rose 8.6% and operating profit climbed 89% from the same period last year, while the operating margin reached 5.6%. Cumulative first-half revenue was 2.1831 trillion won and operating profit was 100.5 billion won, up 7% and 98% respectively.
Overseas business led the earnings improvement in particular. Second-quarter overseas subsidiary revenue was 311.2 billion won, up 28% from a year earlier, while operating profit jumped 133% to 29.6 billion won. In India, the utilization rate at the new ice cream plant in Pune, Maharashtra, rose quickly, expanding peak-season supply volumes, while in the dry confectionery segment, steady growth in Choco Pie sales supported the momentum. The Kazakhstan subsidiary performed well as local sales expansion and export growth continued simultaneously.
Lotte Wellfood assessed that its strategy of expanding local production and distribution networks in overseas markets is paying off. The company explained that as the Lotte brand continues to take root locally around key hubs such as India and Kazakhstan, its global business has established itself as a pillar driving overall performance.
The domestic business also strengthened competitiveness by leading with core brands. The company ran a KBO collaboration featuring Pepero and Xylitol, along with the second installment of the "Kancho Name Marketing" and a World Cone campaign. An earlier-than-usual heat wave also had a positive impact on ice cream sales.
Management efficiency to counter cost burdens also continued. Despite rising prices of raw and subsidiary materials such as packaging and crude milk, and a high exchange rate, the company strengthened solid management and boosted profitability by streamlining low-efficiency SKUs (stock keeping units) and sales channels and improving logistics and procurement processes.
Lotte Wellfood expects external uncertainties, including cocoa bean price volatility and the situation in the Middle East, to continue in the second half, and plans to focus on strengthening global competitiveness. At major overseas subsidiaries such as India and Kazakhstan, it will expand local distribution of the Lotte brand, while in the export business, it will strengthen K-culture-linked marketing and entry into global mainstream distribution channels. Domestically, its strategy is to continue a profitability-focused growth trajectory through season marketing centered on core brands and ongoing management efficiency.
A Lotte Wellfood official said, "Even amid a difficult business environment, including geopolitical instability and rising raw material prices, we were able to continue our earnings recovery through growth at overseas hubs and high-intensity management efficiency," adding, "We will continue solid growth based on expanding our global distribution network, strengthening brand competitiveness, and enhancing our fundamental competitiveness."
