LX International (001120.KS) Q1 2026: Net Profit Slumps 33.4% as Effective Tax Rate Spikes to 40%
A tax anomaly and a ₩426.2 billion working capital build erased cash that operating results suggest the business actually earned.
Source: Quarterly Report (74th Fiscal Year, Q1, January 1–March 31, 2026) — Filed May 15, 2026 with DART | Consolidated Financial Statements | Unit: ₩ billions
LX International posted Q1 2026 consolidated net profit of ₩73.5 billion, down 33.4% year-on-year — a headline that dramatically overstates the deterioration in core operations. The true culprit was a tax anomaly: effective income tax rate surged from 5.9% in Q1 2025 to 40.0% this quarter, ballooning the tax expense from ₩6.9 billion to ₩49.1 billion and singlehandedly erasing ₩42.2 billion from the bottom line. Pre-tax income, meanwhile, actually rose 4.4% to ₩122.5 billion. Operating profit declined a more measured 6.8% to ₩108.9 billion as gross margin expanded while SG&A costs surged 15.7%. The more durable concern is on the cash side: operating cash flow swung from a ₩122.9 billion inflow to a ₩121.8 billion outflow as swelling receivables and inventories absorbed the quarter's earnings in full — meaning Q1 profit existed on paper but not in the bank. Read alongside the annual picture — operating profit collapsed 40.3% in FY2025 to ₩292.2 billion as the post-pandemic commodity and freight supercycle normalized — this quarter reads less as a fresh breakdown than as a cyclically reset business navigating below-the-line turbulence.
