PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩1,250 per share · Prices as of the 2026-10-02 close
Quarterly bottom line has flipped back to profit on recovering affiliate earnings, yet the holding company is simultaneously carrying heavy borrowings and funding its biologics build-out.
Owners' net income turned positive in 1Q26 (KRW 6.5bn) and 2Q26 (KRW 35.6bn), a reversal from the KRW 363.7bn net loss of 4Q25.
Consolidated operating margin slid from 3.5% in 2022 to 1.5% in 2025; 1H26 operating profit was KRW 175.1bn.
The group has raised about KRW 1.73tn this year from non-core and idle asset sales, and the 61.2% LOTTE Rental stake sale has cleared the antitrust review.
LOTTE Biologics' Songdo Plant 1 has secured occupancy approval, but no commercial-supply order has been confirmed yet, making utilization the key issue.
Standalone borrowings and affiliate-support needs remain the core monitoring items flagged by credit rating agencies.
LOTTE Corporation is the holding company of the LOTTE group launched in 2017, and its articles of incorporation define its purpose as controlling and supervising subsidiaries through share ownership.
Consolidated revenue arises mainly from subsidiaries in food (LOTTE Wellfood, LOTTE Chilsung Beverage), convenience stores (Korea Seven), restaurants (LOTTE GRS), IT (LOTTE Innovate) and biologics (LOTTE Biologics).
LOTTE Shopping and LOTTE Chemical, by contrast, are affiliates recognized through equity-method income, so retail and chemical cycles hit the bottom line before they hit revenue.
Heungkuk Securities, in a May 2026 report, cited improving equity-method income from affiliates LOTTE Shopping and LOTTE Chemical as a positive factor.
The group has presented four core businesses (food, retail, chemicals, infrastructure) alongside new growth pillars including LOTTE Biologics' CDMO business, EV charging infrastructure, battery materials and a metaverse platform.
In its November 2024 value-up plan, the company attributed its lower price-to-book ratio versus peers such as SK, LG, GS, HD Hyundai, CJ and LS to relative underperformance of major businesses, and said portfolio management was needed.
On governance, a distinctive feature is the large treasury stake acquired during the spin-off and merger process at inception; in March 2026 the company decided to cancel 5,245,461 shares, equal to 5 percentage points of the 27.5% common-share treasury holding.
SK Securities put the treasury share ratio at 23.7% in a report dated 3 September 2026. Because a holding company's recurring income depends heavily on subsidiary dividends and brand royalties, the recovery in affiliate profits feeds directly into the parent's own cash flow.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩4T | ₩142.2B | 3.5% |
| 2025Q3 | ₩4.2T | ₩185.1B | 4.5% |
| 2025Q4 | ₩3.8T | -₩105.8B | −2.8% |
| 2026Q1 | ₩3.6T | ₩46.1B | 1.3% |
| 2026Q2 | ₩4.1T | ₩129B | 3.2% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩14.1T | ₩489.8B | ₩170.8B | 3.5% | 2.4% | 127.1% |
| 2023 | ₩15.2T | ₩493.7B | -₩15.4B | 3.3% | −0.2% | 139.4% |
| 2024 | ₩15.8T | ₩340.5B | -₩1T | 2.2% | −16.3% | 146.3% |
| 2025 | ₩15.5T | ₩239.4B | -₩647.6B | 1.5% | −10.7% | 144.9% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
Consolidated revenue rose from KRW 14.11tn in 2022 to KRW 15.16tn in 2023 and KRW 15.76tn in 2024, then edged down to KRW 15.54tn in 2025.
Operating profit, however, shrank from KRW 489.8bn in 2022 and KRW 493.7bn in 2023 to KRW 340.5bn in 2024 and KRW 239.4bn in 2025, taking the operating margin from 3.5% to 3.3%, 2.2% and 1.5%.
Owners' net result swung from a KRW 170.8bn profit in 2022 to losses of KRW 15.4bn in 2023, KRW 1,018.8bn in 2024 and KRW 647.6bn in 2025; losses far larger than operating profit suggest interest costs, equity-method results and impairments drove the bottom line.
Operating cash flow nonetheless held above KRW 1tn at KRW 1,237.5bn in 2023, KRW 1,052.9bn in 2024 and KRW 1,156.1bn in 2025, while the debt-to-equity ratio climbed from 127.1% in 2022 to 144.9% in 2025.
On a quarterly basis, 4Q25 posted a KRW 105.8bn operating loss and a KRW 363.7bn owners' net loss, wiping out much of the full-year result.
Then 1Q26 delivered KRW 46.1bn operating profit with KRW 6.5bn owners' net income, and 2Q26 KRW 129.0bn operating profit with KRW 35.6bn owners' net income, two straight profitable quarters.
First-half revenue totaled KRW 7,715.2bn with operating profit of KRW 175.1bn, and SK Securities in a September 2026 report also calculated first-half consolidated revenue up 1.1% and operating profit up 9.3% year on year.
Still, 2Q26 operating profit (KRW 129.0bn) was below 2Q25 (KRW 142.2bn), showing the improvement is not uniform quarter to quarter. Heungkuk Securities said in a May 2026 report that a wider loss at LOTTE Biologics, on scheduled shutdowns and large-scale hiring, was a reason group operating profit missed its estimate.
A holding company's earnings are effectively the sum of the group's four core industry cycles, and those cycles currently point in clearly different directions.
Retail is recovering as domestic consumption and inbound tourist demand overlap, and LOTTE Shopping's first-half 2026 operating profit rose 81.5% year on year to KRW 342.8bn.
Samsung Securities estimated that rising foreign-customer sales are lifting overall department-store same-store growth by roughly 3-5 percentage points.
Chemicals still face oversupply out of China, yet LOTTE Chemical reported 2Q26 revenue of KRW 5,686.4bn and operating profit of KRW 110.1bn, a swing back to profit from a year earlier.
Hotels and duty free also improved, as Hotel LOTTE's first-half operating profit of KRW 135.6bn was more than triple the KRW 44.3bn a year earlier.
CDMO, by contrast, is a market already consolidated around large players; it is a reference-driven industry that weighs prior production track records heavily, and even Samsung Biologics took about a year after completing its first plant to land its first client. Group-level balance-sheet metrics remain heavy.
Combined affiliate net borrowings grew from about KRW 19tn at end-2020 to more than KRW 31tn as of end-June 2026, prolonged weakness at LOTTE Chemical dragged group earnings power, and LOTTE Chemical's rating outlook was cut from AA- stable to AA- negative.
In the Fair Trade Commission's 2026 designation of large business groups, LOTTE's total assets were KRW 142.42tn and its ranking slipped from fifth to sixth.
The near-term focus is how asset sale proceeds are deployed. The Fair Trade Commission approved TPG's acquisition of LOTTE Rental shares on 1 September 2026; the deal covers a 61.2% controlling stake for a total of KRW 1,310.5bn.
Proceeds will be used to improve the financial structure of Hotel LOTTE and Busan LOTTE Hotel. Non-core stake and asset sales executed this year total roughly KRW 1,730bn.
Chemical restructuring is also under way: LOTTE Chemical's Daesan plant completed its spin-off in June and launched on 1 September as H&L Advanced, a combined entity merged with HD Hyundai Chemical, while the Yeosu plant has been in talks with affiliates on an integrated operating framework since its restructuring plan was approved in July.
In biologics, the Songdo Plant 1, which broke ground in March 2024, obtained occupancy approval from the Incheon Free Economic Zone Authority at the end of June, and management said it would begin commissioning and equipment validation in the second half, hold a completion ceremony in November, and aims to secure one or two large contracts within the year.
On estimates, Heungkuk Securities in a May 2026 report projected 2026 consolidated revenue of KRW 15.7tn and operating profit of KRW 401.7bn. Choi Kwan-soon of SK Securities said in August 2026 that efficiency and profitability-focused management would cut 2026 revenue by 3.7% but lift operating profit by 56.8%. These figures are broker estimates, not confirmed company guidance.
Because owners' net income over the last four reported quarters was negative, earnings-based multiples cannot be computed, leaving only asset-based measures.
The share price sits well below book value per share, and the company itself noted in its November 2024 value-up disclosure that its price-to-book ratio was below the average of six peers including SK, LG, GS, HD Hyundai, CJ and LS.
Dividends rest on the dividends the holding company receives from subsidiaries; the firm maintains a policy of keeping total shareholder returns, combining dividends and treasury-share cancellations, at 35% or more of standalone net income, and this year is the final year of the three-year plan announced in November 2024, which makes execution the swing factor.
On the discount to intrinsic asset value, SK Securities said in its 3 September 2026 report that the 29.5% discount to net asset value left limited further downside risk, and noted this discount exceeded the 21.1% average since 2024.
Set against that are the fact that profitability is only in the early stage of emerging from losses and the parent's own borrowing burden, so interpretation hinges on whether one weights asset value or the pace of earnings recovery.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04
The two affiliates that drive holdco earnings moved in the same direction. LOTTE Shopping's first-half operating profit rose 81.5% to KRW 342.8bn, and Hotel LOTTE's KRW 135.6bn was more than triple the KRW 44.3bn a year earlier. LOTTE Chemical swung to a 2Q26 operating profit of KRW 110.1bn from a loss. On a consolidated basis, owners' net income stayed positive in 1Q26 and 2Q26 at KRW 6.5bn and KRW 35.6bn.
Divestment plans have moved into signed-contract and approval stages. The Fair Trade Commission approved TPG's purchase of the LOTTE Rental stake on 1 September for a total of KRW 1,310.5bn.
Non-core stake and asset sales this year total about KRW 1,730bn, including a 90% stake in LOTTE Ecowall (KRW 170.8bn), the Bundang logistics center (KRW 131.1bn), the LOTTE Mart Kintex store (KRW 82.0bn) and the LOTTE Nestle Korea Cheongju plant and land (KRW 34.7bn).
How the proceeds are split between debt repayment and investment will determine how much the financial metrics improve.
Its treasury holding is large even among Korean holding companies.
In March 2026 it decided to cancel 5,245,461 shares, equal to 5 percentage points of its 27.5% treasury stake, and in June 2025 it had sold a 5% treasury block to LOTTE Engineering & Construction affiliate LOTTE Property & Development to shore up its balance sheet.
SK Securities put the treasury ratio at 23.7% in a September 2026 report and said both cancellation and disposal would highlight the value of those shares. The size and timing of any cancellation, however, have not yet been disclosed in detail.
The consolidated debt-to-equity ratio rose from 127.1% in 2022 to 144.9% in 2025, with total liabilities of KRW 13,649.4bn. According to Korea Investors Service, cash and equivalents were recently around KRW 160bn while borrowings maturing within a year reached KRW 2.4tn, highlighting short-term liquidity pressure.
SK Securities also noted in its September 2026 report that standalone net borrowings stood at KRW 3.5tn as of the second quarter, leaving a need for balance-sheet improvement. Heungkuk Securities said in May 2026 that excessive net interest expense would keep net profit improvement limited.
The model builds large capacity first and fills it later, which creates timing risk. Since 2022 the group has injected roughly KRW 1.2tn into LOTTE Biologics through six rights offerings, and total planned spending on the Songdo bio campus is KRW 4.6tn.
LOTTE Biologics posted 2025 revenue of KRW 196.1bn and an operating loss of KRW 132.6bn, with total liabilities up 69.6% to KRW 1,076.8bn from KRW 630.5bn. Utilization is depressed by partial shutdowns tied to Syracuse equipment upgrades running into early 2027 and by reduced orders.
The consolidated operating margin fell for four straight years, from 3.5% in 2022 to 1.5% in 2025.
In 4Q25 a KRW 105.8bn operating loss and a KRW 363.7bn owners' net loss landed together, badly denting the full-year result and showing that costs and impairments can cluster in the fourth quarter. 2Q26 operating profit of KRW 129.0bn also came in below the KRW 142.2bn of 2Q25, so the recovery is not linear.
Revenue has only crept up from the KRW 14tn range to the KRW 15tn range over four years, indicating a modest growth rate.
Rating moves feed directly into funding costs and early-repayment clauses. Korea Investors Service, NICE Investors Service and Korea Ratings all cut LOTTE Corporation's unsecured bond rating from AA- negative to A+ stable in their 30 June 2025 periodic review.
Korea Investors Service subsequently maintained A+/stable for bonds and A2+ for commercial paper in August 2026. However, bonds, commercial paper and loans totaling KRW 642.0bn carry rating triggers that could force early repayment if the rating falls.
The deleveraging scenario depends heavily on execution of disposals. Korea Investors Service warned that if asset sales and business restructuring do not proceed as planned, standalone financial burdens could widen, and said it would monitor disposal outcomes and additional affiliate-support needs.
LOTTE Corporation injected KRW 168.0bn into LOTTE Biologics in 2025 and saw KRW 181.4bn in net cash outflow tied to financial investors exercising put options after LOTTE Global Logistics withdrew its IPO.
A LOTTE Rental stake sale signed in March 2025 previously collapsed after the Fair Trade Commission blocked the combination.
A completed plant is not the same as revenue. Songdo Plant 1 must pass commissioning, validation and quality-system checks, meet regulatory standards such as GMP certification, and clear inspections and approvals.
No client has reportedly been confirmed yet, and the industry has repeatedly flagged concerns about the order gap. Management said it is working to bring one or two large contracts into view within the year, but timing and size are not yet fixed.
Whether the LOTTE Rental stake sale to TPG closes and when proceeds arrive. Brokers and IB market participants treat the use of proceeds as a near-term checkpoint, since group metrics will shift depending on how much goes to repaying hotel-affiliate borrowings.
Third-quarter 2026 consolidated results. Watch the direction versus 2Q26 operating profit of KRW 129.0bn, the contribution from affiliate equity-method income, and whether the LOTTE Biologics loss narrows.
The Songdo Plant 1 completion ceremony the company has flagged and progress on commissioning and equipment validation. The checkpoint is whether it meets its stated goal of achieving GMP readiness and a first commercial-production order by year-end.
Whether a concrete plan for treasury-share cancellation or disposal is disclosed. Heungkuk Securities said in a May 2026 report that the shareholder-return framework needs to advance and that a specific cancellation plan should be laid out. That this is the final year of the three-year plan targeting a 35%-plus payout ratio is also worth tracking.
Disclosure of full-year 2026 results and the dividend decision. Because a KRW 105.8bn operating loss and KRW 363.7bn owners' net loss clustered in 4Q25, the scale of year-end one-off items such as impairments will shape the annual outcome. The outcome of restructuring talks for LOTTE Chemical's Yeosu plant is another item to check.
LOTTE Corporation's last four years can be summed up as revenue stalling in the KRW 15tn range while the operating margin fell from 3.5% to 1.5% and owners' net income stayed negative for three consecutive years.
The KRW 105.8bn operating loss and KRW 363.7bn owners' net loss of 4Q25 marked the trough, and 1Q26 and 2Q26 held in the black with owners' net income of KRW 6.5bn and KRW 35.6bn.
First-half operating profit of KRW 175.1bn rose year on year, but the second quarter alone came in below the prior year, so the pace of improvement varies by quarter.
The bull case rests on the sharp first-half profit jumps at LOTTE Shopping and Hotel LOTTE, roughly KRW 1,730bn of non-core asset sales this year, and optionality around the treasury stake.
The bear case rests on cash of only about KRW 160bn against KRW 2.4tn of borrowings maturing within a year, combined affiliate net borrowings above KRW 31tn as of end-June 2026, and a Songdo plant that reportedly still has no confirmed client.
Ultimately three axes will set the numbers over the next few quarters: allocation of disposal proceeds, absorption of parent-level interest costs, and the first commercial biologics order. This report is for information purposes and contains no buy or sell opinion or target price.
Report written 2026-09-05 · Data as of 2026-09-04
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