LOTTE INNOVATE’s third-quarter operating profit tops expectations as profitability gains come into view

LOTTE INNOVATE said on the 2nd that its consolidated revenue for the third quarter this year was 284 billion won, in line with the market consensus of 286.4 billion won. Operating profit came to 12.4 billion won, 13% above the market forecast of 11 billion won.

This year, LOTTE INNOVATE has strengthened its focus on operational fundamentals through selective contract wins prioritizing profitability, improved operational efficiency and better earnings at its subsidiaries. It is reshaping its business portfolio by maintaining a stable revenue base in its existing IT services business while concentrating its capabilities on high-growth areas.

Industry analysts see expansion of business related to global cloud service providers (CSPs) and revenue from data center DBO (design, build and operate) projects as key growth drivers. 

LOTTE INNOVATE is indeed expanding its external contract wins in the data center business. Starting with the outsourced operation of the KAM Square data center, it has successively secured an edge data center DBO project for IGIS Asset Management and an outsourced operation contract for a large-scale data center in Ansan, strengthening its capabilities across the full range from construction to operation.

Data center operations, in particular, are seen as a key pillar of medium- to long-term growth because long-term contracts can generate recurring revenue. LOTTE INNOVATE plans to move beyond a business structure centered on its group affiliates, expand its business with global customers and external companies, and turn the contracts it has secured into actual revenue growth.

Further growth opportunities are also drawing attention. Factors cited as supporting future business expansion include adding capacity at its own data centers, increased investment in AI and IT infrastructure by group affiliates, and the possibility of entering overseas data center markets such as Vietnam.

In its AI business, LOTTE INNOVATE is advancing its AI transformation (AX) business, which supports workplace innovation at companies, and strengthening its technological capabilities for the on-site application and commercialization of physical AI. It plans to secure technological competitiveness through robot learning and field validation in industrial settings and build a foundation for eventually expanding into the robot-as-a-service (RaaS) business.

LOTTE INNOVATE is also expanding business opportunities in the mobility sector, both at home and abroad. At the recent Gangneung ITS World Congress, the company unveiled its commercialization strategy for key technologies including AI-based smart tolling and autonomous driving, and is pursuing overseas market entry based on domestic demonstration projects and global partnerships.

LOTTE INNOVATE plans to make 2027 a year in which it strengthens the profitability of existing businesses while expanding the scale of new growth businesses. It will bolster the foundation for sustainable growth by increasing external sales centered on data centers and commercializing its AI and mobility businesses.