Lotte Chemical Titan posts Q2 net profit of RM104.85m
CORPORATE NEWS
Wednesday, 31 Jul 20192:16 PM MYT
KUALA LUMPUR: Lotte Chemical Titan Holding Bhd posted net profit of RM104.85mil in the second quarter ended June 31, 2019, which was a sequential improvement from the first quarter due to better overall performance.
It reported on Wednesday its net profit rose by 88.7% from RM55.83mil in Q1 ended March 31 also supported by higher foreign exchange gains and other non-operating income recorded for the quarter.
Its revenue dipped to RM2.13bil from RM2.17bil on-quarter mainly due to slower sales coinciding with festive season and delayed deliveries. Earnings per share were 4.61 compared with 2.46 sen.
Lotte Chemical Titan said average selling prices for both olefins and polyolefins remained at depressed levels from a year ago which had compressed profit margins, amid softening of global economic growth with the on-going external uncertainties.
“Meanwhile, the reshuffling of global trade flows which resulted in increased supply of lower-priced polymers from US into the Asean region also continued to weigh on product prices.
“To brace for the challenging environment, the company continued to maximize their operating efficiencies whereby the plant utilisation rate further improved to 89% in the quarter, better than 87% recorded for the previous quarter and notably higher than 82% a year ago, ” it said.
Lotte Chemical Titan said its strategy was to continuously seek to maximise profits by focusing on better margin products and emphasising on various plant optimisation programmes to boost overall efficiency and production.
However, the Q2 net profit of RM104.85mil was down 66.7% from RM315.02mil a year ago. Its revenue declined by 6.5% to RM2.127bil from RM2.275bil.
It said the lower profit was due to margin squeeze rsulting from fall in product selling prices.
“The lower selling price is mainly due to diversion of polyolefin supply from the US into SEA region as aconsequence of theUS-China trade war as well as softening of global economic growth, ” it said.
The company said it was also impacted by higher distribution expenses, lower foreign exchange gain by RM38.3mil and share of loss from associates.
Lotte Chemical Titan said higher distribution expenses arose from increase in sales volume, higher unit distribution cost and increase in royalty expenses by RM8.9mi.This is partially offset by higher insurance proceed received/receivable of RM45.7mil for furnace damage claim as compared to RM31.2mil for gas turbine claim in Q2 2018.
Read more at https://www.thestar.com.my/business/business-news/2019/07/31/lotte-chemical-titan-posts-q2-net-profit-of-rm10485m#FmKhZwqppMt8YXxF.99
