PETALING JAYA: Lotte Chemical Titan Holding Bhd’s net profit for the fourth quarter ended Dec 31, 2019 surged 26 times to RM187.76 million from RM7.22 million a year ago, mainly due to a one-off gain on the disposal of equity interest in LACC LCC to Eagle US2 LLC for RM139.5 million, capitalisation of depreciation of right-of-use assets of RM6.6 million and lower write down of inventories to net realisable value by RM31.1 million.
Revenue decreased 15.5% to RM1.97 billion from RM2.34 billion, due to a decrease in average product selling prices.
For the full-year period, its net profit tumbled 43.9% to RM439.73 million RM783.33 million, on the back of margin squeeze resulting from the fall in product selling prices.
Revenue slipped 8.7% to RM8.44 billion RM9.24 billion.
Operationally, the group’s overall plant operating rate continued to improve to 88% in FY19 from 83% level a year ago, which contributed to higher production volume for the year.
Moving forward, Lotte Chemical cautioned that the industry would remain challenging due to persisting global market uncertainties arising from geopolitical tensions in the Middle East as well as softening of global economic outlook.
For FY20, its plants in Malaysia are scheduled for a statutory turnaround for all plants, with the exception of one cracker and one polypropylene plant. The plant turnaround is scheduled around end February to early April 2020.
The management highlighted that it will continue to optimise profits and plant operability by focusing on better margin products and emphasising on various plant enhancement initiatives to further improve overall efficiency and production.
President & CEO Lee Dong Woo said the group is actively pursuing further growth opportunities locally. It is also fully committed to supporting the national plastic waste management and environmental initiatives.
“We have entered into collaborations with two national universities namely, University Malaya and University Sains Malaysia to undertake research on value- added opportunities for plastic waste management. In addition, the company through the Malaysian Petrochemicals Associations (MPA) is a member of Malaysian Plastics Pact (MPP), a national initiative with the primary objective of driving the circular plastics economy in Malaysia.”
“Over the next five years, we will focus on our key growth strategies to achieve our vision to be a top tier petrochemical company in Southeast Asia,” Lee elaborated.
At 3.15pm, Lotte Chemical’s share price was trading 10 sen higher at RM2.26 with 2.83 million shares changing hands.
