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(LEAD) Lotte Shopping swings to loss in Q2 amid pandemic

All News 16:46 August 06, 2020

(ATTN: RECASTS throughout with details)

SEOUL, Aug. 6 (Yonhap) -- Lotte Shopping Co. said Thursday it swung to a net loss in the second quarter from the previous year as sales were hit by the new coronavirus outbreak and the company set aside reserves to cover potential losses.

Net losses reached 199 billion won (US$168.1 million) in the April-June period, tumbling from a net profit of 76.9 billion won a year earlier, the key unit of retail giant Lotte Group said in a regulatory filing.

Operating profit declined 98.5 percent on-year to 1.4 billion won and sales declined 9.2 percent to 4.05 trillion won.

The outcome was better than the market consensus of 2 billion won in operating losses in a poll conducted by Yonhap Infomax, the financial arm of Yonhap News Agency, on 17 brokerage houses.

The corporate logo of Lotte Shopping Co. (PHOTO NOT FOR SALE) (Yonhap)

Lotte Shopping, the operator of South Korea's biggest department store, suffered from an industry-wide slump caused by the COVID-19 pandemic as people refrained from visiting offline stores due to the risk of virus infection.

The company said the net loss also came as it set aside reserves worth 340.6 billion won to cover potential loss stemming from its closure of brick-and-mortar stores. The company earlier said it will sell 121 stores within this year.

Lotte Shopping's department store business reported rises in sales and an operating profit in the second quarter compared with three months earlier, on the back of demand for foreign luxury goods and consumer electronics goods.

Lotte Department Store's revenues rose 10 percent on-quarter to 666.5 billion won and its operating profit advanced 54 percent to 43.9 billion won.

In April, Lotte Shopping launched an ambitious online shopping website, Lotte On, which integrates the websites of Lotte's eight affiliates, in a bid to better compete with major e-commerce operators.

sooyeon@yna.co.kr
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