Media: Malaysia’s Lotte Chemical Titan reported the tenth consecutive quarter of losses amid industry headwinds
The heightened losses have been attributed to several key issues: significant inventory write-downs, increased associate losses from Lotte Chemical USA Corp due to a maintenance shutdown, and deepening foreign exchange losses.
Malaysia's Lotte Chemical Titan Holding Bhd (LCT) has reported its tenth consecutive quarterly loss, posting a staggering net loss of RM246.42 million for the third quarter ending September 30, 2024 (3QFY2024). This loss marks a sharp increase from the RM55.58 million loss in the same period last year, reflecting the intensifying challenges that LCT faces in the current petrochemical market.
The heightened losses have been attributed to several key issues: significant inventory write-downs, increased associate losses from Lotte Chemical USA Corp due to a maintenance shutdown, and deepening foreign exchange losses. LCT’s cumulative net loss for the first nine months of FY2024 (9MFY2024) has ballooned to RM673.33 million, a substantial increase from RM593.81 million in the same period last year.
Adding to LCT's woes, plant utilization rates fell dramatically to 57% during the period, down from 67% last year, largely due to planned statutory maintenance. The group expects its annual operating rate to stabilize between 55% and 60% for FY2024.
“Although average selling prices have slightly improved over last year, volatile market conditions and an oversupply of petrochemical products from China continue to disrupt industry dynamics,” stated LCT President and CEO Park Hyun Chul.
On a more optimistic note, LCT has emphasized the nearing completion of its Lotte Chemical Indonesia New Ethylene (LINE) Project in Merak, Indonesia, slated to be fully operational by 2025. Once market conditions stabilize, this project, expected to increase LCT's total production capacity by 65%, could position the company for future growth.
Written by: Derek Yong