Lotte Chemical Reports 1.5 Trillion KRW Operating Profit Last Year, 330% Increase... "Expansion of New Industries"

"Poor Performance Due to Q4 Oversupply and Oil Price Impact"

Lotte Chemical Daesan Plant. (Photo by Lotte Chemical)

[Asia Economy Reporter Moon Chaeseok] Lotte Chemical announced that its consolidated operating profit last year was tentatively estimated at 1.5358 trillion KRW, a 330.3% increase from the previous year. Sales rose 45.7% year-on-year to 17.8052 trillion KRW. Net profit increased by 724% to 1.4449 trillion KRW.

Lotte Chemical explained, "Despite a highly volatile business environment, the expanded use of packaging, medical, and quarantine products related to COVID-19, along with increased demand from front-end industries such as electric, electronics, and automotive sectors, contributed to solid performance. Product spreads (margins) also improved."

However, the fourth quarter was somewhat sluggish due to oversupply in the global chemical market and raw material price burdens caused by rising oil prices. Operating profit for Q4 was 29.7 billion KRW, down 86.3% from the same period last year. Sales and net profit for the same quarter were 4.8429 trillion KRW and 93.2 billion KRW, respectively.

In the basic materials business, the olefin division posted Q4 sales of 2.3362 trillion KRW and operating profit of 64.1 billion KRW. The aromatic division recorded sales of 617.1 billion KRW and an operating loss of 10.9 billion KRW due to opportunity loss costs reflected from regular maintenance at the Ulsan plant.

The advanced materials business reported Q4 sales of 1.1878 trillion KRW and operating profit of 45.1 billion KRW, with profitability reduced due to regular maintenance of production facilities and seasonal effects.

Subsidiary Lotte Chemical Titan posted Q4 sales of 759.5 billion KRW and operating profit of 10 billion KRW. Sales increased following the completion of regular maintenance and recovery of operating rates, but profitability shrank compared to the previous quarter due to stagnant demand and raw material price burdens.

Subsidiary LC USA recorded sales of 147.1 billion KRW and operating profit of 13.4 billion KRW.

Meanwhile, Lotte Chemical decided on a year-end dividend of 8,300 KRW per common share.

Regarding this year's business outlook, Lotte Chemical stated, "Although uncertainties remain due to the COVID-19 Omicron variant, sharp oil price increases, and supply growth, gradual recovery is expected thanks to increased domestic and international demand and improved supply-demand conditions. We will strengthen the competitiveness of existing businesses through the Indonesia petrochemical project and the commercial production of heavy oil and naphtha cracking facilities (HPC) at the domestic Daesan plant in the first half of the year."

They added, "This year, we will actively expand new businesses such as hydrogen and battery materials, as well as high value-added recycled products. We aim to create stable profitability and lay the foundation for sustainable growth."

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