Lotte Wellfood reported strong second-quarter results, driven by growth in overseas operations in India and Kazakhstan, as well as cost efficiencies.
The company announced on August 7 that its consolidated operating profit for the second quarter reached 64.7 billion won, an 88.5% increase compared to the same period last year. Sales rose to 1.1557 trillion won, up 8.6% year-on-year. Net profit surged to 36.1 billion won, a 130.1% increase.
For the first half of the year, cumulative sales totaled 2.1831 trillion won, a 7% increase from the previous year. Cumulative operating profit for the first half was 100.5 billion won, up 98%, with an operating profit margin of 4.6%.
The improvement in performance was primarily driven by overseas operations. In the second quarter, sales from overseas subsidiaries reached 311.2 billion won, a 28% increase from the same period last year. Operating profit from these subsidiaries soared by 133% to 29.6 billion won.
In India, the expansion of operations at the new ice cream plant in Pune, Maharashtra, contributed to increased supply during the peak season, while the growth of Lotte's Choco Pie also positively impacted results. The Kazakhstan subsidiary benefited from both domestic and export growth.
Lotte Wellfood recently began full operations of the fourth production line for Choco Pie at its plant in Rohtak, Haryana, investing approximately 30 billion won to increase local production capacity by about 33%. Sales of Lotte Choco Pie in India surpassed 100 billion won for the first time last year and have grown at an average annual rate of about 20% over the past three years.
Despite cost pressures, the domestic business focused on maintaining profitability. The company streamlined low-efficiency products and sales channels while optimizing logistics and purchasing processes amid rising prices for raw materials like packaging and crude oil, as well as high exchange rates.
Marketing efforts were strengthened around key brands such as Pepero and Xylitol, including collaborations with the Korea Baseball Organization (KBO) and promotions for 'Kancho Name Marketing' and 'World Cone.' Increased demand for ice cream due to early heat also positively affected domestic sales.
Lotte Wellfood anticipates ongoing challenges due to price volatility in cocoa beans caused by climate anomalies and the continuing impact of conflicts in the Middle East. To overcome these challenges, the company plans to enhance its global competitiveness.
Lotte Wellfood aims to expand the handling of Lotte brands in key overseas subsidiaries in India and Kazakhstan, utilizing K-culture for export marketing and increasing presence in major local distribution channels. Domestically, the company will continue to target seasonal demand around key brands while streamlining low-efficiency products and channels to improve cost efficiency.
A company representative stated, “While we expect uncertainties to persist in the second half of the year, we will continue to pursue steady growth focused on profitability through expanding our presence in global mainstream channels, targeting trends around key brands, and enhancing our fundamental competitiveness.”
* This article has been translated by AI.
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