Lotte Corp (004990.KS) Q1 2026: Equity Swing Flips Net Income, Common EPS Stays Negative
Lotte's consolidated earnings crossed into positive territory for the first time in four quarters, but the reversal rests almost entirely on a ₩102.4 billion swing in equity-method income from associates — not operational recovery — leaving common shareholders still in the red after hybrid bond interest deductions.
Source: Quarterly Business Report (분기보고서) — Filed 15 May 2026 with DART (Accession No. 20260515002994) | Consolidated and Separate Financial Statements | Unit: ₩100 million (억원)
Lotte Corp's consolidated net income for Q1 2026 registered ₩14.5 billion, reversing the ₩91.9 billion loss recorded in the same period last year. The swing, however, was not generated by any meaningful improvement in core operations. Consolidated revenue grew only 1.0% to ₩3.62 trillion, and the operating margin, while recovering from a near-zero base, reached just 1.27% — a level that provides almost no cushion against the group's elevated financing costs. The decisive factor was equity-method income on associates, which reversed from a ₩36.4 billion loss to a ₩66.0 billion gain, a ₩102.4 billion turnaround that single-handedly carried the consolidated bottom line back into positive territory. Critically, once the quarterly coupon on Lotte Corp's hybrid bonds (perpetual securities) is deducted from the controlling shareholders' share, common stock EPS remains negative at −₩26 per share, meaning common shareholders have not yet crossed the earnings breakeven threshold despite the headline reversal.
