Lotte Chemical Titan Holdings Bhd achieved a pre-tax loss of RM193.265 million on the back of a turnover of RM2.816 billion for the second quarter ending June 30, 2022, from a pre-tax profit of RM488.570 million on the back of a turnover of RM2.542 billion.
In a Bursa filing, it said that the Group’s revenue has increased by RM 274.3 million at 11% from RM 2,542.6 million to RM 2,816.9 million mainly due to the increase in average product selling price by 16%.
The Group recorded a loss before tax of RM 193.3 million compared to profit before tax of RM 488.6 million in the corresponding quarter, mainly due to margin squeeze resulting from 64% increase in feedstock cost, write down of inventories to net realisable value of RM 96.5 million and decline in results of associated company, Lotte Chemical USA Corp. (“LC USA”).
It said that the business environment is expected to remain challenging in the near future. A protracted RussiaUkraine crisis has caused high volatility in crude oil prices, leading to volatile naphtha costs for our operations.
Besides, the lingering fear of a new lockdown in China and the risk of global recession have hampered buying sentiment for petrochemical products. On a brighter note, the reopening of international borders in Southeast Asia may accelerate economic activities, translating to better demand for petrochemical products. Resilient economic growth of 5.1% in 2022 as forecasted by IMF for Southeast Asian countries, may underpin the demand recovery for petrochemical products in the near term.
