1. What Happened? Lotte Energy’s Q3 Performance Decline

Lotte Energy experienced a challenging Q3 2025, marked by declining sales and a shift to a net loss. The decrease in exports in the materials sector, coupled with rising raw material prices and exchange rate fluctuations, were identified as primary factors. While the construction sector performed relatively well, it wasn’t enough to offset the overall decline.

2. Why Did This Happen? Deteriorating Macroeconomic Conditions and Intensifying Competition

  • Rising Raw Material Prices: The surge in copper prices has increased Lotte Energy’s cost burden.
  • Exchange Rate Volatility: Fluctuations in the KRW/EUR exchange rate likely had a negative impact on the performance of the European subsidiary.
  • Interest Rate Hikes: Interest rate increases in the US, Europe, and Korea have led to higher financing costs and dampened investment sentiment.
  • Intensifying Market Competition: Despite the growth of the electric vehicle and secondary battery markets, Lotte Energy is facing challenges in securing market share.

3. What’s Next? IR Event to Determine Future Stock Price Direction

The Q2 2025 provisional earnings and management’s explanation of business strategies, to be announced at the IR on August 7, will determine the future direction of the stock price. A positive diversification strategy and support from the Lotte Group could improve investor sentiment, but sluggish Q2 earnings and an uncertain growth strategy could put downward pressure on the stock price.

4. What Should Investors Do? Careful Investment Decisions After Reviewing IR Content

Investors should consider the Q2 earnings announcement, management’s explanations, future outlook, risk management strategies for raw material prices and exchange rate fluctuations, and plans to strengthen competitiveness against competitors, all of which will be presented at the IR. As the current stock price reflects market concerns, it is advisable to make cautious investment decisions after confirming the improvement in Q2 earnings and the clarity of the business strategy.