Lotte Chemical Reports 2Q Operating Profit of 32.9 Billion KRW, Down 90.5% YoY

[Asia Economy Reporter Park So-yeon] Lotte Chemical announced on the 7th that its consolidated operating profit for the second quarter of this year was tentatively estimated at 32.9 billion KRW, a 90.5% decrease compared to the same period last year. Sales amounted to 2.6822 trillion KRW, down 32.1% year-on-year, and net profit fell 88.7% to 30.7 billion KRW.

In the second quarter, the poor performance, with operating profit decreasing by 90% compared to the same period last year, is attributed to the explosion accident at the Daesan plant and the impact of the novel coronavirus infection (COVID-19).

However, compared to the first quarter, which recorded losses due to the direct impact of COVID-19 and the March accident, performance improved, and operating profit returned to the black.

By business segment, the basic materials business posted an operating profit of 6.9 billion KRW and sales of 1.4501 trillion KRW in the second quarter.

Although sales volume decreased due to the Daesan plant accident and product prices fell due to the decline in oil prices, resulting in poor performance following the first quarter, the company explained that profitability improved through cost reduction and partial demand recovery.

The advanced materials business recorded an operating profit of 24.3 billion KRW and sales of 722.6 billion KRW. Sales and profitability declined compared to the previous quarter due to the impact of major customers in the Americas and Europe adjusting plant operating rates amid COVID-19.

Lotte Chemical Titan posted an operating profit of 32.6 billion KRW and sales of 443.2 billion KRW. Performance improved as plant operations stabilized after regular maintenance in the first quarter and the effect of using low-cost raw materials was realized.

The U.S. subsidiary LC USA recorded an operating loss of 12.8 billion KRW and sales of 99.7 billion KRW. Due to a short-term imbalance in ethane supply and demand in the U.S., ethane prices surged and demand for major products decreased, resulting in a return to losses.

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