AlwaysFree: LOTTE Chemical Titan Registered Higher Revenue For 3Q FY2022, The Net Loss Was Largely Due To Weakened Market Demand

LOTTE Chemical Titan is a subsidiary of LOTTE Chemical Corporation under the LOTTE Group 

• In 3Q FY2022, the Group’s revenue increased by 6% YoY1 attributable to the higher average product selling price.  
• The Group recorded a net loss of RM356.1 million for 3Q FY2022 due to a drop in margin spread resulting from weakened market demand, higher feedstock costs, write down of inventories and other external factors.   
• Crude oil market sentiment remained mixed on global recession fear, with naphtha prices fluctuating in line with crude oil prices.

According to the company’s website press release on October 27, 2022, LOTTE Chemical Titan Holding Berhad (LCT), the largest overseas subsidiary of LOTTE Chemical Corporation (LOTTE Chemical) under the LOTTE Group, announced its third quarter financial results ended 30 September 2022 (3Q FY2022). In 3Q FY2022, LCT Group recorded an increase in revenue from RM2.24 billion to RM2.37 billion, up by 6% or RM138.0 million YoY. Its two principal product categories: - olefins & derivative products and polyolefin products, registered higher revenue by 10% and 5%, respectively. However, the Group recorded a net loss of RM356.1 million mainly due to:

• A drop in margin spread due to weakened market demand in the downstream fabrication industry and global recession fears.  
• Higher naphtha feedstock costs.   
• A write-down of inventories of RM71.9 million to the net realisable value.   
• A decline in the share of profit from the associate company, LOTTE Chemical USA Corporation.  

In the first nine months of the financial period ended 30 September 2022 (9M FY2022), the Group’s revenue increased by 11% (or RM804.7million) YoY, with revenue from olefins & derivatives products and polyolefins products increased by 25% and 8%, respectively, due to the increase of average selling price. The Group recorded a net loss of RM402.6 million for the period under review mainly due to a drop in margin spread and other external factors as mentioned above.   

Mr. Park Hyun Chul, President & Chief Executive Officer of LCT, said, ‘The market is significantly affected by the fears of a global recession. Our customers continue to be cautious in their purchases because of the raising interest rate environment, which affects the demand for our finished products. Based on a report published by Independent Chemical & Energy Market Intelligence (ICIS) on 19 September 2022, China’s voracious economic growth has made it the world’s biggest importer of polymers. However, the country’s demand for polyethylene, and polypropylene, recently, are falling mainly due to the country’s zero-Covid policy. Even though the direct export of our products to China is opportunistic, the decline in demand for petrochemical products from China has indirectly disrupted the supply and demand dynamic in the region. Furthermore, the crude oil market sentiment remains mixed on global recession fear and the Russian – Ukraine crisis, causing the naphtha prices to fluctuate in line with the crude oil prices. Due to a drop in margin spread as a result of weakened market demand and other external factors, we recorded a net loss in this quarter even though our revenue was up by 6%.’

‘Maintaining a strong financial resilience is crucial for LCT during this challenging period. As a responsible business entity, we always embed a sustainability plan within our operations as a critical driver for business growth and for creating value for our stakeholders. We continuously exercise an effective optimisation plan by balancing our production outputs and economic efficiencies. Internally, our business fundamentals remain strong. With our healthy cash balances and zero borrowing position, we can ride through the volatility and overcome the challenges to materialise our Vision to become the top-tier petrochemical company in Southeast Asia.’ added Mr. Park. 

To maintain business sustainability, LCT will stay in line with its parent company, LOTTE Chemical’s vision, ‘Every Step for Green’. Currently, LCT is conducting a measurement to establish its greenhouse gas emission baseline and the exercise is expected to be completed in end 2022. Thereafter, the Company will develop a Carbon Emission Management Roadmap to achieve its carbon neutrality.   

About LOTTE Chemical Titan Holding Berhad 

LOTTE Chemical Titan Holding Berhad (LCT or Company) is the subsidiary of LOTTE Chemical Corporation under the LOTTE Group. Established in 1991, the company is Malaysia’s first standalone polyolefins producer and one of the largest integrated olefin and polyolefin producers in Malaysia and Southeast Asia (SEA).  

LCT aims to create a better world and cater to the needs of people by enhancing their quality of life. LCT produces two principal product categories: olefins & other derivatives and polyolefins. The company is in people’s everyday life as polyolefins, which comprise polyethylene (PE) and polypropylene (PP), are the most basic building blocks in the plastic fabrication industry. PE and PP are common materials for producing products ranging from daily necessities, e.g. electrical appliances, consumer packaging, and household products, to industrial materials, e.g. automotive parts, textile, general industrial applications, healthcare, and agricultural products.  

LCT’s production site in Malaysia consists of 12 plants located on two sites in Pasir Gudang and Tanjung Langsat, Johor, and LCT owns a 40% stake in LOTTE Chemical USA Corporation in Houston, Texas. In 2006, it expanded its regional footprint with 3 polyethylene plants in Indonesia through its subsidiary, PT LOTTE Chemical Titan Nusantara. The company has also commenced the construction of the LOTTE Chemical Indonesia New Ethylene (LINE) Project in Indonesia in first quarter of 2022, and the completion of the project is expected in the year 2025. LCT envisions to be a top-tier petrochemical company in SEA.

For any media enquiries, kindly contact: - 

Felicia Chow 

Communications 

Email: feliciachow@lotte.net   

Tel: +603 2089 5546 / +6012-764 6591 

Tags: All Chemicals,All Feedstocks,All Plastics,AlwaysFree,Asia Pacific,English,Korea,Malaysia,NEA,SEA