Lotte Chilsung Beverage announced on the 2nd that it recorded sales of KRW 936.9 billion, operating profit of KRW 42.4 billion, and net profit of KRW 25.4 billion for the first quarter of this year (consolidated). Sales increased by 37.8% compared to the same period last year (KRW 679.8 billion). However, operating profit decreased by 28.5% compared to the previous year (KRW 59.3 billion), and net profit also decreased by 16.5% compared to the previous year (KRW 30.4 billion).
(Source = Financial Supervision Service)
According to a business division, the first quarter sales of the beverage division (separate) recorded KRW 431.3 billion, an increase of 2% compared to the same period last year. However, operating profit fell by 38.6% over the same period to just 23.9 billion won. The company explained that this was due to an increase in business expenses due to high raw material prices and high exchange rates.
What is encouraging is the development of zero-calorie carbonated and energy drinks. Sales of zero-calorie carbonated beverages in the first quarter were KRW 70 billion, up 9.4% from the same period last year. The importance of zero products is growing, accounting for 30% of the entire carbonated category.
Sales of energy drinks increased by 31.3% compared to the same period last year due to the increased demand for strengthening concentration and replenishing energy during exercise and outdoor activities. Juice category sales also increased by 2.9% during the same period due to alternative demand due to increased fruit prices. Export performance to the United States, Japan, and Southeast Asia, led by Milkis and Aloe Juice, also increased by 14.4% compared to the same period last year.
Lotte Chilsung Beverage plans to strengthen marketing and sales activities in the zero carbonated market in line with the peak summer season. In line with health trends, we are also preparing to launch a new latte type coffee product containing oats in the third quarter. In order to target the global market, we intend to expand the share of the overseas business to the highest 30% level this year by implementing a channel expansion strategy in local markets, focusing on North America and Europe.
The liquor division recorded 214.8 billion won in sales (separate) in the first quarter, an increase of 3.4% compared to the same period last year. Operating profit increased by 4.7% over the same period to 18.3 billion won. Sales growth in the soju and beer categories led the growth. In particular, sales of ‘Saero’ soju recorded 37.7 billion won, an increase of 34.2% compared to the same period last year, and beer sales increased due to increased sales of the new product ‘Crush’ launched in November last
Lotte Chilsung Beverage plans to focus its capabilities across the company to strengthen its competitiveness in soju and expand the base of its new beer product squeeze through the new product ‘New Apricot’ launched in April and the first refresh in May.
An official from Lotte Chilsung Beverage said, “We will work hard to achieve our annual goal by diversifying our product portfolio to meet consumer needs that have diversified since the coronavirus pandemic.”
Lotte Chilsung Beverage’s (consolidated) performance goals for this year are KRW 4.2 trillion in sales and KRW 250 billion in operating profit. The goal is to achieve sales of 2.02 trillion won and operating profit of 180 billion won in the beverage business, and sales of 850 billion won and operating profit of 40 billion won in the spirits business.
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