Lotte Chemical Titan reports wider net loss of RM246mil in 3Q


KUALA LUMPUR: Lotte Chemical Titan Holding Bhd (LCT) expects continued uncertainty in the global business environment, with geopolitical factors like the Russia-Ukraine War and rising Middle East tensions driving fluctuations in crude oil prices.

Additionally, LCT said the sluggish economy and surplus of petrochemical products in China have affected supply and demand dynamics.

Despite this, the group’s main markets include Malaysia, Indonesia, and the Asean region.

“Barring unforeseen circumstances and taking into consideration plant statutory turnaround and business optimisation, the operating rate guidance for FY2024 is 55% to 60%. This guidance may change from time to time,” LCT said in a filing with Bursa Malaysia.

In the third quarter ended Sept 30, LCT’s net loss widened to RM246.4mil compared with RM55.6mil in the same period last year while revenue was flat at RM1.95bil against RM1.96bil previously.

LCT said the flat performance was primarily driven by changes in write down of inventories to its net realisable value, lower sales volume, increased losses from foreign exchange as well as higher losses from its associate, LOTTE Chemical USA Corporation (LCUSA), reflecting challenging market conditions impacting overall profitability.

For the nine months ended Sept 30, LCT saw a slight dip of 3% in revenue, decreasing from RM5.8bil to RM5.6bil. This decline was primarily due to lower sales volume, which was partially offset by the increase in the average product selling price and the strengthening of US dollar against ringgit.

Its net loss increased by 13%, rising from RM615.4mil to RM695.8mil, largely due to changes in write-down of inventories to its net realisable value, increased losses from an associate company and foreign exchange, higher finance costs as well as US dollar's depreciation against ringgit.

“We are making determined efforts to navigate the headwinds in this challenging market environment. While average selling prices have shown slight improvement compared to last year, the industry has been weighed down by volatile market conditions and an oversupply of petrochemical products from China, which have disrupted supply and demand dynamics,” president and CEO Park Hyun Chul said in separate statement.

In response, the group remains attentive to various factors that could affect product pricing, including inflationary pressures, government sanctions, and changes in tax or tariffs.

“In ensuring business resilience, the management is vigilantly monitoring operations and carefully managing financial liquidity to achieve greater efficiency and maintain high product quality.

“The Lotte Chemical Indonesia New Ethylene (LINE) Project in Merak, Indonesia is nearing completion and expected to be fully completed by 2025. Upon completion, the LINE Project will expand the group’s total production capacity by 65%.”

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Lotte Chemical Titan , LCT

   

Next In Business News

Singapore Q3 GDP up 5.4% y-o-y, higher than advance estimate; 2024 forecast upgraded
Ringgit extends uptrend against greenback in early trade
FBM KLCI rebounds as Wall Street returns to a rally
Trading ideas: PetDag, Atlan, Thong Guan, Maxim, Globetronics, 7-Eleven, Petron, DRB-Hicom, Dayang, MSM, Aeon, SunCon, UEM Sunrise
Oil rises 2% as Russia-Ukraine war escalates
Wall St ends higher as Dow, S&P hit one-week tops
7-Eleven’s quarterly revenue climbs
SimeProp seeks quality assets for recurring income
Lower interest costs buoy TSH nine-month showing
Zetrix a profit driver for MyEG Services

Others Also Read