Lotte Chilsung Beverage profit falls as weak domestic demand, rising costs hit 2025 performance
Sluggish consumption and higher costs push Lotte Chilsung Beverage into a Q4 operating loss despite selective category growth.
SOUTH KOREA – Lotte Chilsung Beverage reported weaker financial performance last year as sluggish domestic demand, rising costs and one-off expenses weighed on profitability.
The company said consolidated sales for the year declined 1.3% to 3.97 trillion won (US$2.94 billion), compared with 4.02 trillion won (US$2.98 billion) recorded a year earlier.
In 2024, Lotte Chilsung Beverage had surpassed the 4 trillion won mark for the first time in its history, but sales slipped back into the 3 trillion won range the following year.
Operating profit fell 9.6% year-on-year to 167.2 billion won (US$124 million), while net profit declined 14.7% to 51.2 billion won (US$38 million).
The company’s performance deteriorated sharply in the fourth quarter, when it posted an operating loss of 12 billion won (US$8.9 million), compared with an operating profit of 9.2 billion won (US$6.8 million) in the same period a year earlier.
Fourth-quarter sales dropped 3.1% to 894.3 billion won (US$663 million), and the company recorded a net loss of 43.9 billion won (US$32.5 million).
Lotte Chilsung Beverage attributed the weak results primarily to a contraction in domestic consumption. Persistently high inflation and an economic slowdown reduced sales volumes across both beverages and liquor, while the number of major sales channels declined amid convenience store reductions and restaurant closures.
The company also said higher exchange rates increased costs, while greater weather volatility negatively affected domestic profitability. In the fourth quarter, earnings were further pressured by one-off expenses, including costs related to a voluntary retirement programme and provisions for long-term employee benefits.
In the beverage segment, annual sales fell 5% to 1.81 trillion won (US$1.34 billion), and operating profit dropped 29% to 73.9 billion won (US$55 million).
Fourth-quarter beverage sales declined 6.4% to 375.7 billion won (US$278 million), with the segment posting an operating loss of 17.9 billion won (US$13.3 million). Sales fell across most categories, including carbonated drinks, juice, coffee, bottled water and sports drinks.
However, the company said energy drink sales rose 5.5% on increased outdoor activity demand, while the near-water category, led by the zero-calorie version of the When You Need 2% More brand, grew 14.8%.
The liquor segment also struggled, with sales down 7.5% to 752.7 billion won (US$558 million) and operating profit falling 18.8% to 28.2 billion won (US$21 million). In the fourth quarter, liquor sales stood at 177.3 billion won (US$131 million), and the segment posted an operating loss of 2.8 billion won (US$2.1 million).
Looking ahead, Lotte Chilsung Beverage said it plans to make this year “a turning point for structural improvement,” focusing on productivity and cost competitiveness.
The company said it will launch new health-oriented carbonated products in the first half of the year, expand low- and non-alcohol offerings in liquor, and pursue profitability improvements and regional expansion in global bottler operations.
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