[비즈한국] Signals of improvement have emerged simultaneously in Lotte Group's duty-free and construction divisions, which have long been considered burdensome business units. Hotel Lotte posted an operating profit of 229.4 billion KRW on a consolidated basis last year, marking a turnaround to profit, with the duty-free division also swinging to an operating profit of 51.8 billion KRW. Although Lotte E&C saw a decline in operating profit compared to the previous year, it improved its financial soundness indicators by lowering its debt-to-equity ratio and PF contingent liabilities.
According to the 2025 business report disclosed by Hotel Lotte on March 31, revenue last year was 4.7262 trillion KRW, a 6.8% decrease from the previous year, but operating profit turned to a surplus. By business division, the hotel division's revenue rose by 6.3% to 1.5083 trillion KRW, and operating profit increased by 119.7% to 117.7 billion KRW. The World business division recorded 401.9 billion KRW in revenue and 60.0 billion KRW in operating profit.
In the same report, the duty-free division recorded 2.816 trillion KRW in revenue and 51.8 billion KRW in operating profit. Although revenue fell by 13.8% from the previous year, the bottom line turned to a profit. Lotte Duty Free achieved an operating profit for four consecutive quarters from the first to the fourth quarter of last year. The company explained that while revenue decreased due to a reduction in the proportion of commercial customers, profitability improved through fixed cost savings and an expansion in sales from individual free travelers (FIT).
Lotte E&C also stated in its business report disclosed on the same day that it recorded 7.9099 trillion KRW in consolidated revenue and 105.4 billion KRW in operating profit last year. Revenue increased by 0.6% year-on-year. Although operating profit fell by 37.8%, the company explained that this was the result of a one-time factor, specifically the preemptive reflection of bad debt expenses for certain project sites. Gross profit increased by 58.2 billion KRW compared to the previous year, and the cost-to-revenue ratio fell by 0.7 percentage points to 92.8%.
Financial indicators also improved. Lotte E&C's debt-to-equity ratio dropped by 9.3 percentage points from 196% at the end of 2024 to 186.7% at the end of 2025, while its current ratio rose from 112% to 120%. PF contingent liabilities decreased from 3.6 trillion KRW at the end of 2024 to the 3.1 trillion KRW level by the end of last year. Lotte E&C announced that it has secured more than 1 trillion KRW in cash liquidity since the end of last year through means such as the issuance of hybrid bonds.
These results are notable in that they confirm different paths of improvement for the duty-free and construction divisions, which had been major sources of concern regarding profitability and financial burden within Lotte Group. The duty-free division changed its profit structure by swinging to a surplus, while the construction division focused on reducing PF and debt burdens.