KUALA LUMPUR (Nov 6): Lotte Chemical Titan Holding Bhd (KL:LCTITAN) on Wednesday reported larger third quarter losses, dragged by inventory write-downs, higher losses from its 40%-owned associate Lotte Chemical USA Corp due to a maintenance shutdown, and increased foreign exchange losses.
Net loss for the three months ended Sept 30, 2024 (3QFY2024) widened to RM246.42 million from RM55.58 million in 3QFY2023, the olefins and polyolefins producer said in an exchange filing Wednesday.
The latest loss-making quarter marked its 10th consecutive quarter in the red since 2QFY2022. Revenue slipped to RM1.95 billion from RM1.96 billion, mainly due to lower sales volume, which was partly offset by higher average product selling price.
For the first nine months of FY2024 (9MFY2024), the group’s net loss expanded to RM673.33 million from RM593.81 million in the same period a year ago, while revenue dipped 2.57% to RM5.64 billion from RM5.79 billion in 9MFY2023.
Overall plant utilisation dropped from 67% to 57% due to scheduled statutory turnarounds conducted in 2024. The group guided that its operating rate would come between 55% and 60% for FY2024.
“The group expects the global business environment to remain uncertain in the near future,” Lotte Chemical said, citing geopolitical issues, such as the Russia-Ukraine war and the Middle East conflicts, that will continue to impact crude oil prices.
“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,” Lotte Chemical Titan president and chief executive officer Park Hyun Chul said in a statement.
He said the group is “making determined efforts to navigate the headwinds”.
“In ensuring business resilience, the management is vigilantly monitoring operations and carefully managing financial liquidity to achieve greater efficiency and maintain high product quality," he said.
He also updated that 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%."
Lotte Chemical Titan’s shares closed up half a sen or 0.52% to 96 sen on Wednesday, giving it a market capitalisation of RM2.21 billion. The counter has dropped over 30% year-to-date.
Source: TheEdge - 7 Nov 2024
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