Lotte Chemical Titan Holdings Bhd posted a net loss of RM178.03 million in the first quarter ended March 31, 2024 (1QFY2024) from from RM224.76 million a year ago, mainly from the decreased share of losses from its associate company, Lotte Chemical USA Corp, which offset the lower sales volume recorded.

KUALA LUMPUR (May 2): Lotte Chemical Titan Holdings Bhd’s (LCTitan) logged a net loss of RM178.03 million in the first quarter ended March 31, 2024 (1QFY2024), making the group's eight straight quarter in the red as product costs continued to exceed revenue.

Nevertheless, the latest quarterly loss narrowed year-on-year (y-o-y) from RM224.76 million, mainly stemming from decreased share of losses from its associate company, Lotte Chemical USA Corp, which offset the lower sales volume recorded.

Share of losses from its associate more than halved to RM18.87 million, compared to RM43.54 million a year before, its filing showed.

As a result, its loss per share declined to 7.82 sen for 1QFY2024, compared to 9.87 sen for 1QFY2023.

Revenue for the quarter dropped 2.72% to RM1.92 billion, from RM1.97 billion a year before, which LCTitan attributed to the lower sales volume, but partially offset by higher average selling prices amid strengthening of US dollar against ringgit.

Its cost of goods sold of RM2.04 billion is 6.16% higher than the revenue in the quarter. This is narrower than 9.25% recorded in 1QFY2023, when its cost of goods sold stood at RM2.15 billion.

On outlook, the group said in a statement that it is "committed to a plant turnaround in the coming period" focusing on efficiency improvements, enhancing plant performance, and significantly improving plant safety.

Its president and chief executive officer Park Hyun Chul said LCTitan remains cautious in managing the business due to uncertainties arising from oil price volatility, petrochemical glut, and a slowdown in economic activity due to inflationary pressures and escalating geopolitical tensions.

“With a utilisation rate of 65%, in line with previous guidance, we will focus on optimising production outputs, implementing efficient cost and cash flow management practices, and positioning the group for long-term sustainability,” Park said.

Concurrently, the construction of the Lotte Chemical Indonesia New Ethylene (LINE) project is progressing on schedule and expected to be completed by 2025. Upon completion, the group’s total production capacity will increase by 65%.

The LINE project includes the development of a cracker plant that will use naphtha and liquefied petroleum gas as its feedstock to produce, among others, 1,000 kilo tonnes per annum (KTA) of ethylene and 520 KTA of propylene.

LCTitan closed unchanged at RM1.11, giving the company a market capitalisation of RM2.54 billion. The stock has fallen 28% from this year’s high of RM1.53 in February.