Seoul: Lotte Shopping Co., part of the South Korean retail conglomerate Lotte Group, announced on Friday a significant decrease in its first-quarter net profit, which plunged 75.1% from the previous year, attributed to a base effect. The company's net profit for the quarter ending in March dropped to 18.1 billion won (US$13 million) from 72.8 billion won recorded in the same period last year, as noted in a regulatory filing.
According to Yonhap News Agency, the dramatic decline in net profit was linked to the absence of one-off gains that had positively impacted the 2024 first quarter results. Specifically, the previous year's profits were bolstered by 45 billion won due to the termination of a department store lease agreement in Chengdu and the liquidation of Lotte Super's domestic assets. The spokesperson highlighted that the current year's first quarter results were adversely affected by shareholding losses from affiliates like Lotte Card Co. and Hanssem Co.
Despite the drop in net profit, Lotte Shopping's operating profit saw a substantial increase, climbing 29% to 148.2 billion won from 114.9 billion won a year earlier. This improvement was driven by increased profits from the company's overseas operations. Notably, Lotte Mall Westlake Hanoi, a large complex featuring a shopping mall, supermarket, hotel, aquarium, and movie theater, reported a profit for the first time since its opening in September 2023.
However, the company's sales experienced a slight decline, falling 1.6% to 3.45 trillion won from 3.51 trillion won during the same period last year. Lotte Shopping remains a key player in the retail industry, operating South Korea's largest department store chain by sales and the second-largest discount store chain.