KUALA LUMPUR (July 27): Lotte Chemical Titan Holding Bhd reported a widened net loss of RM313.47 million for its second quarter ended June 30, 2023 (2QFY2023), compared to a net loss of RM145.92 million in the same quarter a year ago, as it recorded lower margin spread amid weakened market demand due to the volatile external demand and higher cost of operation.

Revenue dropped 34.04% to RM1.86 billion from RM2.82 billion due to lower product selling prices and sales volume. No dividends were declared.

This is the group's fifth consecutive quarter in the red since 2QFY2022. The latest losses are about 39.47% higher than the RM224.76 million net loss it incurred in 1QFY2023, when revenue came in about 5.58% higher at RM1.97 billion.

For the six-month period ended June 30 (1HFY2023), the group's net loss expanded to RM538.23 million from RM41.93 million in 1HFY2022, as revenue dropped to RM3.83 billion from RM5.58 billion on lower demand and selling prices. It also registered a share of loss from Lotte Chemical USA Corp.

President and chief executive officer Park Hyun Chul said the group has been experiencing a challenging period under the weight of a deteriorating external environment.

“The market volatility is expected to remain elevated, arising from the slower economic growth as policymakers raised interest rates to tame inflation.

“Besides, new capacities that have gradually come onstream posed downward pressure on petrochemical prices. Against this backdrop, the management is steadfast to its optimisation plan by balancing our production outputs and economic efficiencies while maintaining strict cost management to ensure the financial positions of the group remain healthy,” said Park.

He added that the Lotte Chemical Indonesia Ethylene (LINE) project in Indonesia is progressing on schedule and is set to be the group's growth driver, filling the gap of Indonesia as a net importer of petrochemical products. The project is slated for completion in 2025.

Lotte shares closed unchanged at RM1.25 on Thursday, valuing the group at RM2.89 billion.