Lotte Chemical Reports 244.9 Billion Won Operating Loss in Q2... Deficit Doubles

Lotte Chemical recorded an operating loss in the second quarter of this year that fell significantly short of market expectations. The prolonged downturn in performance is being driven by continued weakness in the core basic chemicals segment, which is key to profitability. The company plans to pursue a recovery in profitability through restructuring its business portfolio around commodity petrochemicals and divesting non-core assets.

On August 8, Lotte Chemical announced its preliminary consolidated results for the second quarter of 2025: sales of 4.197 trillion won, an operating loss of 244.9 billion won, and a net loss of 471.3 billion won. The operating loss was more than 60 billion won worse than the market consensus of around 180 billion won, marking an 'earnings shock' level of underperformance. The operating loss doubled compared to the same period last year (121.3 billion won), and deteriorated by 85.2% from the previous quarter.

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In particular, losses in the commodity petrochemicals segment, centered on basic materials, dragged down overall results. Most major subsidiaries, including LC Titan in Malaysia and LC USA in the United States, are understood to have continued posting losses. The cumulative operating loss for the first half of the year reached 377 billion won, with a net loss of 717.5 billion won.

Alongside its earnings release, Lotte Chemical stated, "We expect a gradual recovery from the third quarter, but challenging business conditions such as weakened global demand and high fixed costs are expected to persist." The company added, "We are preparing restructuring efforts for commodity petrochemicals to secure mid- to long-term competitiveness."

Specifically, the company is in the process of reorganizing its business portfolio by divesting non-core assets both domestically and overseas. In February of this year, Lotte Chemical signed an agreement to sell domestic non-core assets, with the transaction expected to close within the third quarter. In July, the company also completed the sale of water treatment facility assets held by a subsidiary. The company explained, "We are in the early stages of discussions regarding equity sales or attracting strategic investment to optimize the structure of overseas petrochemical assets, particularly in Southeast Asia."

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