Lotte Chemical Reports Operating Profit of 1.1076 Trillion KRW Last Year, Down 43% YoY (Update)

[Asia Economy Reporter Hwang Yoon-joo] Lotte Chemical announced on the 7th that its operating profit last year was 1.1076 trillion KRW, a 43.1% decrease compared to the previous year. During the same period, sales amounted to 15.1235 trillion KRW, down 5.9% year-on-year. Net profit fell 53.8% to 758.2 billion KRW.

Lotte Chemical explained, "It was a challenging year due to demand contraction caused by global supply increases and external instability," adding, "We secured stable profitability of the U.S. plant based on shale gas and the advanced materials business centered on compound products, and actively responded to market environment changes by diversifying raw materials through joint ventures with refiners and expanding production facilities such as PC (polycarbonate) and EOA (ethylene oxide derivatives)."

Operating profit in the fourth quarter of last year was 142.6 billion KRW, a 42.2% increase compared to the previous year, while sales decreased by 0.9% to 3.6921 trillion KRW.

Looking closely at the fourth-quarter performance of Lotte Chemical’s major divisions, the olefin division saw profitability decline due to one-time costs from regular maintenance at the Daesan plant and reduced product spreads caused by strong raw material prices.

The aromatic division showed low profitability due to oversupply from continuous new capacity additions and weak product demand. For subsidiaries, Lotte Advanced Materials (currently Lotte Chemical Advanced Materials Business) experienced a slight decline in profitability due to decreased sales volume of key products during the off-season, and Lotte Chemical Titan’s profitability declined due to continued oversupply in the Southeast Asian market.

Meanwhile, LC USA, which began commercial operations in the first half of last year, maintained solid profitability based on stable customer acquisition and high cost competitiveness derived from shale gas.

Lotte Chemical stated, "External uncertainties caused by the inflow of new capacity both domestically and internationally and demand contraction are expected to continue this year," and added, "We plan to do our best to generate stable profits by strengthening the competitiveness of existing businesses based on synergies with Lotte Advanced Materials while expanding high value-added specialty businesses."

This content was produced with the assistance of AI translation services.