PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩3,400 per share · Prices as of the 2026-10-02 close
Revenue hit a record first-half high, but recovering domestic beverage and liquor profitability and normalizing the Philippine subsidiary remain unresolved tasks.
Q2 2026 revenue rose 2.4% to KRW 1,112.9 billion, but operating profit fell 10.4% to KRW 55.8 billion, with a 5.0% operating margin that fell short of market expectations.
Q4 2025 swung to an operating loss of KRW 12.0 billion and a net loss of KRW 44.0 billion due to one-off costs including voluntary retirement expenses.
The combined share of overseas subsidiaries and exports in total revenue expanded from 43.9% in 2025 to roughly 47% in Q2 2026.
Philippine Pepsi (PCPPI) is undergoing a minority buyout and delisting process toward becoming a wholly owned subsidiary.
The company set a 2026 consolidated target of KRW 4.1 trillion in revenue and KRW 200 billion in operating profit, up 19.6%.
Lotte Chilsung Beverage is a comprehensive beverage and liquor company organized into a beverage division, a liquor division, and a global division that includes overseas subsidiaries.
The beverage division produces and sells Chilsung Cider, Pepsi, Milkis, Icis, Let's Be coffee, and Gatorade, competing in the domestic carbonated drink, bottled water, coffee, and sports drink markets. Beverage division revenue fell 5.0% year over year to KRW 1,814.3 billion in 2025.
The liquor division handles soju brands Chum Churum and Saero, the rice wine Baekhwasoo, wines, and the ready-to-drink (RTD) brand Soonhari Jin, with 2025 revenue declining 7.5% to KRW 752.7 billion.
However, the RTD category surged 143.3% year over year in Q2 2026 following a relaunch and expanded lineup of Soonhari Jin, driving the liquor division's results.
The global division consists of subsidiaries in the Philippines (PCPPI), Pakistan, and Myanmar plus exports, with the combined share of overseas subsidiary and export revenue expanding from 43.9% in 2025 to roughly 47% in Q2 2026.
Philippine Pepsi was consolidated as a subsidiary following the 2023 management control acquisition, and in 2026 it has been undergoing a minority share buyout and delisting process toward full ownership.
Liquor exports expanded distribution to about 24,000 outlets across 48 US states through a partnership with US distributor E&J Gallo.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩1.1T | ₩62.4B | 5.7% |
| 2025Q3 | ₩1.1T | ₩91.8B | 8.5% |
| 2025Q4 | ₩894.3B | -₩12B | −1.3% |
| 2026Q1 | ₩952.5B | ₩47.8B | 5.0% |
| 2026Q2 | ₩1.1T | ₩55.8B | 5.0% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩2.8T | ₩222.9B | ₩131.1B | 7.8% | 9.4% | 161.7% |
| 2023 | ₩3.2T | ₩210.7B | ₩165.9B | 6.5% | 11.3% | 177.0% |
| 2024 | ₩4T | ₩184.9B | ₩59.1B | 4.6% | 3.9% | 177.0% |
| 2025 | ₩4T | ₩167.2B | ₩47.2B | 4.2% | 3.1% | 167.7% |
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
On an annual basis, revenue grew from KRW 2,841.7 billion in 2022 to KRW 4,024.5 billion in 2024, while operating profit moved in the opposite direction, declining from KRW 222.9 billion to KRW 184.9 billion over the same period.
In 2025, revenue fell to KRW 3,971.1 billion, operating profit declined to KRW 167.2 billion, and net income attributable to owners was only KRW 47.2 billion.
Q4 2025 in particular swung to a loss, with revenue of KRW 894.3 billion, an operating loss of KRW 12.0 billion, and a net loss attributable to owners of KRW 44.0 billion, which the company attributed mainly to one-off costs including voluntary retirement programs and long-term employee benefit provisions.
Performance then recovered in Q1 2026 with revenue of KRW 952.5 billion and operating profit of KRW 47.8 billion, and Q1 operating profit was reported to have surged 91% year over year, well above market expectations.
In Q2, revenue reached KRW 1,112.9 billion with operating profit of KRW 55.8 billion and net income attributable to owners of KRW 25.6 billion, though operating profit fell 10.4% year over year and the operating margin of 5.0% was reported to have fallen short of the market consensus.
Analysts pointed to logistics cost pressure from high oil prices and Middle East tensions, along with rising packaging material costs for cans and PET, as key drags. In contrast, the liquor division supported profitability as RTD growth drove a 156.6% increase in its Q2 operating profit.
For the first half overall, revenue reached KRW 2,065.4 billion (+3.4%) and operating profit KRW 103.6 billion (+18.6%), as the Q1 rebound largely offset the Q2 slowdown.
The domestic beverage and liquor market has entered a maturity phase, facing structural pressure from a shrinking sales channel base—fewer convenience stores and restaurant closures—compounded by sluggish domestic consumption amid an economic slowdown.
On the consumption trend front, zero-calorie, low-sugar, and low-alcohol preferences are pronounced, with zero-calorie lineups driving carbonated drink growth and low-alcohol, RTD, and non-alcoholic categories driving liquor growth.
Overseas, markets with higher population growth such as the Philippines, Pakistan, and Myanmar have shown relatively resilient growth, providing the backdrop for strengthening the company's position as a global comprehensive beverage company.
That said, the Philippine subsidiary also saw its profitability squeezed by rising raw material costs and logistics burdens tied to high oil prices and geopolitical issues.
Elevated oil prices and logistics costs are a shared risk across the industry, and domestic liquor competitor Hite Jinro has also seen operating profit decline recently amid the broader consumption slowdown.
Against this backdrop, Lotte Chilsung Beverage is responding through price increases, cost competitiveness measures, and consolidation of production and logistics hubs as part of a broader restructuring effort.
The company has set a 2026 consolidated target of KRW 4.1 trillion in revenue and KRW 200 billion in operating profit, up 19.6% year over year.
For the second half, the price increase implemented in late June is expected to be fully reflected starting in Q3, and Hanwha Investment & Securities estimated in an August 21, 2026 report that second-half consolidated revenue would reach KRW 2,028.4 billion with operating profit of KRW 99.0 billion, up 24.2% year over year.
On logistics and production efficiency, the Gangneung regional distribution center covering the Gangwon area has already begun operations, and the Daejeon central distribution center covering the Chungcheong and Jeolla regions is being prepared for opening within the year.
Philippine Pepsi (PCPPI) is expected to become a wholly owned subsidiary following a minority share buyout and delisting process, after which expanded synergy is anticipated between existing Pepsi brands such as Gatorade and Mountain Dew and Lotte's own brands.
Under the group's value-up plan, Lotte Chilsung Beverage has set targets of KRW 5.5 trillion in revenue, a debt ratio below 100%, and a consolidated shareholder return ratio of 30% or higher by 2028.
However, Hanwha Investment & Securities, in its August 21, 2026 report, assigned a 'Hold' rating with a target price of KRW 110,000, stating that an upgrade would require confirmation of sustained sales volumes after the price hike and stabilized profitability at overseas subsidiaries.
The current share price trades at a discount relative to net asset value, a notable characteristic. Given that profit levels have declined in recent years compared with 2022–2023, the valuation band the market applies has also settled at a lower range than in the past.
On the dividend policy front, the company has set a target of raising its consolidated shareholder return ratio to 30% or higher by 2028, leaving the pace of future payout expansion as a point to watch.
However, Hanwha Investment & Securities has offered the view that, with limited room for core-business profit growth, even the realization of non-operating asset value is unlikely to trigger a valuation re-rating.
Ultimately, the speed of domestic profitability recovery and the durability of overseas subsidiary normalization are cited as the key variables that will shape the valuation trajectory going forward.
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 combined revenue share of overseas subsidiaries and exports rose from 43.9% in 2025 to roughly 47% in Q2 2026. As Philippine Pepsi (PCPPI) transitions to a wholly owned subsidiary, faster decision-making and expanded brand synergy are anticipated.
The Philippine unit's recent quarterly operating profit rose sharply year over year on improved operating conditions.
RTD brand Soonhari Jin's relaunch and expanded lineup drove a 143.3% year-over-year surge in related revenue in Q2 2026. Soju brands Chum Churum and Saero also continued to post sales growth, and the partnership with US distributor E&J Gallo expanded distribution to 48 US states. This has partially offset the slowdown in domestic liquor demand.
The price increase implemented in late June is expected to be fully reflected starting in Q3. Hanwha Investment & Securities estimated second-half 2026 consolidated operating profit would rise 24.2% year over year. Analysts also suggested that favorable peak-season weather could support second-half profit defense.
Alongside sluggish domestic consumption amid an economic slowdown, structural pressure has emerged from a shrinking sales channel base as convenience store numbers decline and restaurants close.
In Q4 2025, these factors combined to push the company into an operating loss of KRW 12.0 billion and a net loss of KRW 44.0 billion. Both the beverage and liquor divisions posted lower annual revenue and operating profit in 2025 compared with the prior year.
Rising logistics costs tied to high oil prices and Middle East instability, along with increased packaging material costs for cans and PET, were cited as key drivers of the Q2 2026 operating profit decline.
Overseas subsidiaries also saw Q2 operating profit fall 27.0% year over year due to raw material and logistics cost burdens. If these cost pressures persist, they could offset a significant portion of the price increase benefits.
The 2025 targets of KRW 4.31 trillion in revenue and KRW 240 billion in operating profit set at the 2024 earnings release were later cut to KRW 4.03 trillion and KRW 185 billion, and actual results came in even lower at KRW 3.971 trillion in revenue and KRW 167.2 billion in operating profit. Repeated guidance misses could take time to rebuild market confidence.
International raw material prices for sugar, coffee, and palm oil, along with packaging material costs for cans and PET, directly affect costs. Overseas subsidiaries are exposed to multiple currencies, making exchange rate volatility another factor influencing results. Prolonged high oil prices and geopolitical risk could add further logistics cost burdens.
Discussions around legislating a sugar levy are being cited as a burden for the food and beverage industry broadly. Changes in taxation and labeling regulations for low-alcohol and non-alcoholic liquor could also affect liquor division strategy.
Product renewals such as lowering soju alcohol content could have varying effects on revenue depending on consumer reception.
The process of making Philippine Pepsi (PCPPI) a wholly owned subsidiary could involve integration costs and procedural uncertainty. If overseas subsidiary profitability remains lower than domestic levels, it could act as a margin dilution factor for consolidated results.
Political and economic volatility inherent to emerging markets such as Pakistan and Myanmar also remains a latent risk.
This is the point to check the actual reflection of the late-June price increase and whether overseas subsidiary profitability has recovered.
This is the planned delisting completion date for Philippine Pepsi (PCPPI) from the Philippine Stock Exchange, allowing confirmation of the completion of full subsidiary ownership.
It is worth checking whether the Daejeon central distribution center begins operations within the year and assessing the resulting logistics efficiency effect.
This is the point to verify whether the annual guidance of KRW 4.1 trillion in revenue and KRW 200 billion in operating profit was met, along with the reliability of the company's guidance track record.
Lotte Chilsung Beverage saw both revenue and operating profit decline in 2025 and posted a Q4 loss due to one-off costs, before showing a mixed pattern in the first half of 2026 with a strong Q1 rebound followed by a Q2 slowdown.
While the domestic beverage and liquor business faces structural pressure from weak consumption and shrinking sales channels, the growing combined share of overseas subsidiaries and exports in total revenue signals a shift in the company's growth axis.
The full consolidation of Philippine Pepsi, expanded RTD and liquor exports, and the reflection of second-half price increases are cited as key variables that will shape future results.
However, repeated guidance downgrades and temporary cost burdens at overseas subsidiaries leave questions about the sustainability of profit recovery. Whether the group's value-up plan, including expanded shareholder returns, proceeds as scheduled also warrants continued monitoring.
Ultimately, the pace of domestic profitability recovery and the durability of overseas business normalization are likely to be the key variables shaping future performance and market assessment.
Report written 2026-09-05 · Data as of 2026-09-04
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