Lotte Corporation's 2026 Large Business Group Disclosure: Inclusion of 12 Affiliates by Deemed Consolidation and Internal Transaction Details
Lotte Corporation included 12 companies such as CY Prime, Beauty Bakery, Korea Forensic, Golden Seas Corporation, Golden Planet, Naturepage, Miseong Korea, CI Korea, CY Global, G&G Global, Heoyusan Korea, and C Green Energy as affiliates on April 2, 2026; most of these entities are in capital impairment or deemed dissolved, with minimal business activities, resulting in limited financial impact.
Lotte Corporation maintained a stable financial structure with total assets of KRW 9.09 trillion and a debt-to-equity ratio of 84.06% at the end of the previous fiscal year; on a consolidated basis, total assets were KRW 150.13 trillion with a debt-to-equity ratio of 110.28%.
Lotte Corporation's controlling shareholder, Shin Dong-bin, and related parties held a 69.43% stake, while treasury shares accounted for 23.69%, indicating potential for shareholder return policies such as share cancellation.
Major internal transactions among affiliates include logistics services by Lotte Global Logistics (KRW 1.08 trillion), IT services by Lotte Innovate (KRW 697.7 billion), and commodity brokerage by Lotte International (KRW 504.8 billion), mostly conducted through private contracts.
Lotte Corporation received KRW 124.4 billion in management advisory and brand royalty fees from affiliates, with management service fees amounting to KRW 45.8 billion, highlighting its revenue base as a holding company.
Total debt guarantees for affiliates amounted to KRW 9.85 trillion, primarily for Lotte Chemical's overseas subsidiaries (KRW 6.07 trillion) and Hotel Lotte's duty-free and hotel entities (KRW 1.89 trillion).
Key affiliates continue to underperform: Hotel Lotte is in capital impairment, and Lotte Chemical posted a net loss of KRW 949.2 billion.
[AI Summary]This disclosure provides a comprehensive view of Lotte Group's governance and financial status. The inclusion of 12 non-listed affiliates aims to strengthen control, but their weak financial conditions limit short-term stock price upside. Lotte Corporation's stable finances and treasury shares are positive, but poor performance at key affiliates like Lotte Chemical and substantial debt guarantees pose investment risks.
KOSPI Filing Information
Filing: [Correction of Description] Large Enterprise Group Status Disclosure [Annual and First Quarter Filing (Representative Company)]