Lotte Chemical revenue decreased by 29% or RM 788.2 million from RM 2,759.5 million in Q1 2022 to RM 1,971.3 million in Q1 2023, the group said this was mainly due to the decrease in average product selling price and sales volume.
Average plant utilisation was recorded at 70% compared to 85% in the corresponding quarter as part of the Group’s business optimization measure. Demand was weaker alongside global recession fear. The Group recorded RM 286.4 million of loss before tax compared to profit before tax of RM 105.8 million in the corresponding quarter, mainly due to a decline in margin spread and share of loss from the associated company, Lotte Chemical USA Corp. The share of profit of LC USA in the correspondence quarter was contributed from a one-off gain of RM45.7 million on the disposal of equity interest in a joint venture operation after tax and higher margin spread.
Lotte added the loss before tax in Q1 2023 was mitigated by a reversal of the write-down of inventories to net realizable values of RM 33 million and an increase in derivative gain of RM 6 million. As a result, the group recorded a net loss of RM 231.6 million as compared to net profit of RM 102.9 million in the corresponding quarter.
Compared to the preceding quarter, the group’s revenue decreased by 5% to RM 1,971.3 million from RM 2,068.0 million in the preceding quarter, mainly due to lower average product price due to the weakening of US Dollars against Ringgit Malaysia. The Group’s loss before tax has reduced by 36% to RM 286.4 million in Q1 2023 mainly contributed by decreased feedstock costs amid weaker demand for raw material as regional crackers operating rate was a lower and higher reversal of write-down of inventories to net realisable value.
Amidst the current market uncertainties, the company said it will monitor closely the global economic conditions and
the aggregate supply and consumption patterns that correspond to the prospect of the petrochemical industry.
Barring unforeseen circumstances and taking into consideration plant utilisation rate and business optimisation, Lotte said the operating rate guidance for FY2023 is 75% to 80%.
