Lotte Shopping announced on the 6th that its operating profit last year increased by 5.7% compared to the previous year, excluding one-time expenses such as estimated liabilities from the Supreme Court ruling on ordinary wages.
Sales decreased by 3.9% to 13.9986 trillion won, and the net loss amounted to 984.3 billion won, marking a shift to deficit.
Fourth-quarter operating profit fell by 27.3% year-on-year to 147.2 billion won, while sales and net loss were 3.4771 trillion won and 1.0063 trillion won, respectively.
A representative of Lotte Shopping said, "Due to the prolonged sluggish domestic consumption, increased uncertainty in the domestic situation, and an unfavorable consumer environment, combined with ongoing efforts to improve profitability across various divisions, sales saw a slight decline."
Operating profit last year stood at 473.1 billion won, down 6.9% from the previous year. The company noted that when excluding one-time expenses such as estimated liabilities from the Supreme Court ruling on ordinary wages, operating profit increased by 5.7% compared to the previous year.
This performance includes the results of Lotte Shopping's real estate asset revaluation conducted for the first time in 15 years last year. Lotte Shopping revaluated 7 trillion won worth of land assets last year for the first time since 2009 to reflect the actual value of its assets and improve its financial structure.
As a result of the asset revaluation, the book value of land increased by 9.5 trillion won to 17.7 trillion won, and the debt ratio fell from 190.4% to 128.6%. After maintaining a surplus until the third quarter of last year, the annual net profit shifted to a deficit due to impairment recognition related to the asset revaluation and goodwill impairment.
Lotte Shopping expects the asset revaluation to have a positive effect on its credit rating and in terms of securing investment resources.
By division, department stores saw net sales decline by 0.5% to 3.3193 trillion won, while operating profit fell by 17.8% to 400 billion won.
However, domestic department store transaction volume recorded 18.4 trillion won, achieving the highest performance in history. Last year, department stores began their Time Village shopping mall business and implemented renovations to strengthen the competitiveness of core stores, including the head office and Incheon branch. Notably, the Jamsil branch surpassed 3 trillion won in transaction volume last year, two years after exceeding 2 trillion won in 2022.
Lotte Mart's sales and operating profit declined by 2.8% and 25.5% to 5.5765 trillion won and 65 billion won, respectively. Lotte Super's sales decreased by 0.8% to 1.2962 trillion won, but operating profit increased by 14.4% to 29.3 billion won. The company explained that while sales at existing stores grew by 1.0% and 8.9% centered on renovated stores, overall sales slightly decreased due to the impact of store efficiency improvements aimed at enhancing profitability.
The sales of the e-commerce division operating Lotte On amounted to 119.8 billion won, a decrease of 11.3% compared to the same period last year, while a net loss of 68.5 billion won was recorded.
LOTTE HIMART's sales reached 2.3567 trillion won, down 9.7% from the same period last year, and operating profit dropped by 79.1% to 1.7 billion won. The company noted that excluding the impact of changes to ordinary wage standards, it recorded an increase of 45.1% compared to the previous year.
Lotte Home Shopping saw sales of 924.9 billion won, a 1.8% decrease from the previous year, while operating profit increased by 503.4% to 49.8 billion won. Adjustments to a profit-focused product portfolio, strengthening senior marketing, and efforts to reduce selling and administrative expenses were effective.
Lotte Cultureworks recorded sales of 451.7 billion won, a decrease of 19.6% compared to the same period last year, but efforts to cut selling and administrative expenses resulted in a net profit of 300 million won.
Lotte Shopping's overseas business saw a 5% increase in annual sales and a 115% increase in operating profit. Sales and operating profit in Vietnam, led by Lotte Mall Westlake Hanoi, increased by 20% and 217%, respectively, while both sales and operating profit also increased in Indonesia. Lotte Shopping plans to finalize the organization of the International Headquarters (iHQ) within the first half of the year and aims to serve as a hub for business expansion in Southeast Asia.
Kim Won-jae, head of the finance division at Lotte Shopping, said, "In 2024, despite a decline in sales due to business activities focused on strengthening the fundamentals of all divisions, the operating profit excluding one-time expenses showed an increase compared to the previous year," adding, "We will strive to overcome the impact of the stagnant domestic market through strengthening overseas businesses and new initiatives this year."