Lotte Chemical Titan Holdings Bhd (LCT) is still in the red and recorded more losses, with a 9% increase of net loss year-on-year (YoY), to RM812.7 million for the financial year ended 31 December 2023 (FY2023) compared to the previous financial year (FY2022).
“(This is on the back of lower) revenue of RM7.65 billion for FY2023. The weaker performance was mainly due to decline in margin spreads, share of loss from Lotte Chemical USA Corporation (LC USA); partially offset by reversal of inventory write-down to its net realisable value,” it said. it said in a Bursa filing today (Jan 29).
For the quarter under review (4Q FY2023), the olefins and polyolefins producer in Southeast Asia registered a lower net loss of RM197.3 million, representing a 42% year-on-year improvement compared to a net loss of RM342.5 million in the same period last year.
“The improvement was largely attributable to improved margin spreads resulting from lower feedstock costs and a foreign exchange gain.”
“Revenue in 4Q FY2023 also declined, amounting to RM1.86 billion compared to RM2.07 billion in the same quarter last year. The decline was mainly due to lower sales volume, as demand was hindered by slower economic activities in the region.
LCT president and chief executive officer Park Hyun Chul said 2023 remained a very challenging year amid lower economic growth in China and Europe.
“The conflict in the Middle East has elevated the volatility of crude oil prices which are highly correlated with the prices of our feedstock, naphtha.
“Against the backdrop of the market uncertainties, the group has implemented the business optimisation plan by balancing our production outputs and economic efficiencies, leading to a lower overall plant utilisation of 67% in FY2023 compared to 77% in the corresponding year.”
Park gave an update on the construction of the Lotte Chemical Indonesia New Ethylene (LINE) Project, saying it is progressing on schedule.
“The project serves as a key strategic expansion for the group, contributing an additional 65% to the total existing production capacity of LCT upon its completion in 2025.
“The LINE Project will enable us to capitalise on the anticipated demand for our products in Indonesia given that the country is a net importer of petrochemical products,” he continued.
“Despite the challenging business environment, we are committed to delivering sustainable growth to our stakeholders. We will continue to implement our optimisation plan and enhance our product quality while upholding disciplined management of our costs and financial liquidity.
“We will stay true to our core values and mission, and forge ahead to become a top tier petrochemical company in Southeast Asia,” added Park.
