Lotte Chemical Reports Operating Loss of 758.4 Billion KRW Last Year... Returns to Deficit

Continued External Instability Including China's COVID-19 Lockdowns

[Asia Economy Reporter Choi Seoyoon] Lotte Chemical announced on the 9th that it recorded an operating loss of 758.4 billion KRW on a consolidated basis last year.

Sales increased by 22.9% year-on-year to 22.2761 trillion KRW, but net profit for the period decreased by 97% to 41.1 billion KRW.

Lotte Chemical explained the poor performance by stating, "External uncertainties continued due to China's COVID-19 lockdowns, the prolonged Russia-Ukraine war, a global economic recession leading to decreased product prices and demand, and rising raw material costs."

2022 Lotte Chemical Performance Status [Image provided by Lotte Chemical]

Lotte Chemical said, "Despite the difficult business environment, it was a year of laying the foundation for sustainable growth by establishing Vision 2030 to secure three major future growth engines?battery materials, hydrogen energy, and recycling?deciding on future business investments such as the acquisition of Iljin Materials, and promoting the sale of non-core overseas subsidiary Lotte Chemical Pakistan (LCPL)."

In the fourth quarter of last year, sales increased by 6.5% year-on-year to 5.4959 trillion KRW, but operating profit turned to a loss of 397.5 billion KRW.

By business segment, the basic materials business recorded sales of 3.167 trillion KRW and an operating loss of 285.7 billion KRW in Q4 last year. Although the burden of raw material prices eased somewhat as oil prices gradually stabilized, low profitability was seen due to decreased demand amid continued global economic weakness.

The advanced materials business recorded sales of 1.0794 trillion KRW and operating profit of 32 billion KRW during the same period. Sales slightly decreased compared to the previous quarter due to a decline in product demand, but profitability improved as major raw material prices stabilized and maritime freight burdens decreased.

Subsidiary Lotte Chemical Titan recorded sales of 620.4 billion KRW and an operating loss of 111.7 billion KRW. It showed low profitability due to falling product prices and weak demand.

Subsidiary LC USA recorded sales of 207.5 billion KRW and an operating loss of 25.6 billion KRW. Although the cost burden eased due to the stabilization of ethane prices, a raw material, the market weakness continued due to global MEG supply pressure.

[Image courtesy of Lotte Chemical]

Regarding this year's outlook, Lotte Chemical stated, "Uncertainties in the external environment are expected to continue for the time being due to the US-China global supply chain restructuring, global economic inflation, and oversupply caused by capacity expansions from China."

It added, "We will enhance profitability and corporate value based on the completion of the acquisition of Iljin Materials and diversification of the business portfolio through expansion of high value-added products, and make this year a year to establish ourselves as a leading company in green energy and specialty materials through continuous investment and realization of future new businesses such as hydrogen, batteries, and eco-friendly products."

Lotte Chemical decided on a year-end cash dividend of 3,500 KRW per common share. It is scheduled to be finally approved at the regular shareholders' meeting in March.

Lotte Chemical Dividend Trend
[Image provided by Lotte Chemical]

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