Lotte Innovate posted double-digit growth in operating profit in the second quarter this year, helped by stronger core-business competitiveness and improved results at major subsidiaries.
Lotte Innovate disclosed that second-quarter sales on a consolidation basis rose 54% from a year earlier to 274.5 billion won. Operating profit increased 54% over the same period to 12.4 billion won. The operating margin was 4.5%, up 1.7 percentage points (p).
A Lotte Innovate official said, "Operating profit increased as performance at major subsidiaries improved on the back of solid profitability in the core business."
The company said it maintained stable profitability on a separate basis through selective order intake that considered profitability and by improving project execution efficiency. In line with Lotte Group's profitability-focused management stance, a strategy of reviewing business viability from the bidding stage translated into better results, it noted. Profit and loss at major subsidiaries also improved year over year, cited as one of the factors lifting consolidation results.
Lotte Innovate plans to strengthen its mid- to long-term growth engines centered on data center design, build and operate (DBO) businesses and AI transition. It is expanding the business based on experience accumulated over about 20 years of operating data centers in Seoul, Daejeon and Yongin.
Lotte Innovate is expanding its DBO business that performs design, build and operate in one stop, based on experience accumulated over about 20 years of operating data centers in Seoul, Daejeon and Yongin.
In Nov. last year, it signed a memorandum of understanding (MOU) with Aisij Gongjo for cooperation on data center businesses, and in Dec. it won the DBO project for the Camsquare Yongin Data Center. In Feb. this year, it additionally secured the IGIS Asset Management Edge Data Center DBO project.
It is also responding to growing AX (AI transition) demand within the group. Lotte Innovate is supporting business innovation at group companies based on a "hybrid AX execution framework" that uses both its self-developed integrated AI platform "i-Member" and external Generative AI.
It is strengthening business competitiveness in the physical AI field as well. After establishing a dedicated physical AI and robotics organization in Aug. last year, in Feb. this year it unveiled a next-generation convenience store incorporating humanoids in collaboration with Korea Seven.
Subsidiaries are also continuing the trend of improving profitability. EV charging subsidiary EVSIS is stepping up its push into global markets, focusing on North America and Southeast Asia, and Caliverse is delivering new customer experiences by combining immersive commerce technology with the distribution capabilities of group companies such as LotteON and Lotte Himart.
A Lotte Innovate official said, "While maintaining a profitability-centered management stance, we will accelerate commercialization of future growth businesses such as data center DBO and AX to solidify a foundation for sustainable growth."