Lotte Shopping swings to loss in 2017 due to THAAD row

Lotte Shopping Co., the retail affiliate of South Korea’s fifth-largest conglomerate Lotte Group, said Thursday it swung to the red in 2017 from a year earlier amid a diplomatic row between Seoul and Beijing over the deployment of a U.S. anti-missile system here.

Its losses reached 20.6 billion won (US$18.9 million) on a consolidated basis last year, compared to a net profit of 246.9 billion won posted in 2016, the company said in a regulatory filing. The firm operates Lotte’s key retail units, including its department store and hypermarket chains.

Operating income stood at 530.3 billion won, down 30.5 percent on-year, and sales dropped 24.6 percent to 18.2 trillion won during the cited period, it said.

The numbers reflect the performance of Lotte Shopping and its subsidiaries, including Lotte HiMart Co., which specializes in electronics and home appliances.

The drop in the revenue was largely expected following Beijing’s apparent retaliation over Seoul’s deployment of the U.S. Terminal High Altitude Area Defense (THAAD) system on its soil. Lotte Shopping was one of the most affected companies from the economic retaliation after it signed a land-swap deal with the Seoul government to host the missile shield system.

Shares of Lotte Shopping soared 4.17 percent to close at 250,000 won on the main bourse Thursday, with the broader KOSPI index gaining 0.46 percent. The earnings results were released after the stock market closed.