Hotel Lotte Q3 OP up 47% on yr, gives impetus to its IPO drive

Hotel Lotte Co., the hotel and duty-free business arm of South Korea fifth largest conglomerate Lotte Group, reported a 47 percent on-year surge in operating profit in the July-September period, giving fresh impetus to its IPO drive and shift to holding structure.

The company in its regulatory filing on Thursday said its consolidated operating profit for the third quarter reached 203.7 billion won ($175 million), up 47 percent from a year ago. Its net profit gained 10.8 percent on year to 253.7 billion won, and sales added 12 percent to 5.4 trillion won during the period.

Duty-free business contributed 82.9 percent to the total revenue, hotel business 11.7 percent, theme park business 4.3 percent, and resort business 1 percent.

“Big-spending Chinese visitors to Korea have been on the rise. The company has significantly reduced costs from duty-free business with closure of Incheon International Airport locations. The inner city outlet in Sogong-dong, Seoul also has helped expand sales with online platforms,” said a company official.

The robust income can give traction to its IPO plan and reorganization to a holding company structure. It launched the holding entity Lotte Corp. in 2017 but its efforts to make Hotel Lotte public were suspended in 2016 due to bribery suit of group chair Shin Dong-bin.

Lotte Group currently controls its domestic operations via Hotel Lotte. It is owned by Lotte Holdings, the holding entity of Lotte companies in Japan, which in turn is owned by the Japanese packaging firm Kojunsha.

Hotel Lotte, the third-largest stakeholder of Lotte Corp. with 11.04 percent, owns 31.13 percent in Lotte Property & Development, 38.23 percent in Lotte Aluminum, 43.07 percent in Lotte Engineering & Construction, and 25.67 percent in Lotte Rental.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]