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View of Lotte World Tower. (Photo = Lotte) |
[Alpha Biz= Kim Jisun] On Thursday, January 27, five listed affiliates of Lotte Group—Lotte Corporation, Lotte Wellfood, Lotte Chilsung Beverage, Lotte Chemical, and Lotte Shopping—held an "Lotte Group IR Day" at Conrad Hotel in Yeouido, Seoul, for institutional investors and securities analysts.
The event aimed to update the market on each subsidiary's financial restructuring and business reorganization efforts following previous announcements.
During a previous integrated IR event on November 28, Lotte Group emphasized that its liquidity remained stable and outlined self-help measures, including land asset revaluation, the sale of underperforming assets, and investment reductions.
Lotte Group's total revenue for last year reached KRW 80.1 trillion, recovering to pre-pandemic levels seen in 2019 (KRW 79.9 trillion). However, its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) fell by KRW 1.9 trillion from 2019, totaling KRW 6.5 trillion.
Lotte is focusing on strengthening its core businesses while divesting non-strategic operations and idle assets.
In December last year, the group sold its rental car subsidiary, Lotte Rental, and dissolved its healthcare business, which was deemed less viable as a future growth engine.
Additionally, Lotte Wellfood’s Jeungpyeong plant and Lotte Chemical’s Pakistan subsidiary were sold, along with the ATM business unit of Korea Seven (formerly Lotte PS Net), which operates 7-Eleven convenience stores.
Unlisted subsidiary Lotte Construction plans to liquidate assets worth KRW 1 trillion, including its headquarters site in Jamwon-dong, Seocho-gu, Seoul. This will reduce its debt ratio from 210% at the end of Q3 2024 to 150%.
Lotte Shopping and Hotel Lotte also saw asset increases through real estate revaluation, with Lotte Shopping’s assets growing by KRW 8.7 trillion and Hotel Lotte’s by KRW 8.3 trillion (excluding impairment losses). As a result, Lotte Shopping's debt ratio dropped from 190% to 129%, while Hotel Lotte's decreased from 165% to 115%.
Lotte Shopping divested underperforming assets last year, including Lotte Mart’s Suwon Yeongtong branch and Lotte Super’s Yeoui branch.
Meanwhile, Hotel Lotte is considering selling assets from its 'L7' and 'City' hotel brands and exiting unprofitable overseas duty-free businesses.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
