KUALA LUMPUR (Oct 26): Lotte Chemical Titan Holding Bhd (LCT) narrowed its net loss to RM55.58 million or 2.44 sen per share for the third quarter ended Sept 30, 2023 (3QFY2023) due to reversal of inventory write-down as well as improved margin spreads resulting from lower feedstock costs.

In comparison, LCT posted a huge net loss of RM355.5 million or 15.61 sen per share in 3QFY2022. It has been loss making for six straight quarters.

Quarterly revenue fell 17.42% to RM1.96 billion in 3QFY2023 from RM2.37 billion a year earlier amid lower average product selling price.

LCT’s filing showed the group’s cumulative net loss for the nine months ended Sept 30, 2023 (9MFY2023) widened to RM593.81 million from RM397.43 million a year earlier while cumulative nine-month revenue declined 27.17% to RM5.79 billion from RM7.95 billion.

The group attributed the lower earnings for 9MFY2023 mainly due to weakened margin spreads, higher cost of operation and share of losses from its associate company, Lotte Chemical USA Corporation.

Commenting on LCT’s financial performance, its president and chief executive officer Park Hyun Chul said the group’s business environment remains challenging, weighed down by slower economic growth in major economies and the new tension in the Middle East.

According to him, the group’s management is vigilantly monitoring the geopolitical situation and the aggregate supply and consumption dynamics to navigate LCT through this volatile environment.

“We will continue implementing our optimisation plan by balancing the group’s production outputs and economic efficiencies, enhancing our product quality while upholding our disciplined approach to managing costs and financial liquidity,” he said.

Park said, Lotte Chemical Indonesia New Ethylene (LINE) project is slated for completion in 2025, and this new manufacturing facility will increase the group’s total production capacity by 65%.

“Given that Indonesia is a net importer of petrochemical products, the project is our strategic initiative to capture the anticipated demand for our products in the country. We believe the project will further strengthen LCT’s market presence and materialise its vision to become a top tier petrochemical company in Southeast Asia,” Park added.

Year to date, LCT has fallen over 22% and closed at RM1.13 on Thursday for a market capitalisation of RM2.61 billion. The closing price represents a 78.4% discount to the net tangible assets per share of RM5.23 as at end-September.