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Lotte Chemical office building. (Photo=Lotte Chemical) |
[Alpha Biz= Reporter Kim Jisun] Lotte Chemical has recorded a deficit for the third consecutive quarter due to the sluggish petrochemical market.
On August 8, Lotte Chemical announced in a regulatory filing that it posted an operating loss of 111.2 billion KRW in the second quarter on a consolidated basis, with the deficit widening compared to the 69.1 billion KRW loss in the same period last year. However, revenue increased by 3.4% to 5.248 trillion KRW during the same period, while the net loss improved by 24.4% year-over-year to 107.1 billion KRW.
Breaking down by business segments, the basic chemicals segment (including Lotte Chemical's basic materials business, LC Titan, LC USA, and Lotte GS Chemical) reported revenue of 3.6069 trillion KRW and an operating loss of 139.2 billion KRW. This represents a 2.3% increase in revenue and a 22.2% improvement in operating loss compared to the previous year.
The advanced materials segment recorded revenue of 1.1344 trillion KRW and an operating profit of 75.7 billion KRW, marking increases of 3.2% and 0.8% respectively, compared to the same period last year.
Lotte Fine Chemical posted revenue of 422.1 billion KRW and an operating profit of 17.1 billion KRW, showing decreases of 2.1% and 75.2% respectively.
Lotte Energy Materials achieved its highest-ever quarterly revenue with 262.7 billion KRW and an operating profit of 3 billion KRW.
Lotte Chemical stated, "We are accelerating the portfolio enhancement of our five strategic business units: basic chemicals, advanced materials, fine chemicals, battery materials, and hydrogen energy," adding that the company aims to strengthen its financial soundness through measures such as accounts payable securitization and working capital improvement.
In response to the petrochemical market downturn and poor performance, Lotte Chemical plans to reduce its capital expenditure (CAPEX) from 3 trillion KRW this year to 1.7 trillion KRW next year.
Additionally, the company announced plans to secure over 400 billion KRW in additional cash this year through working capital securitization and factory operation efficiency projects.
Lotte Chemical is pursuing an asset-light strategy by divesting inefficient assets and withdrawing from strategic businesses to reduce the proportion of its basic chemicals business.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
