According to the company’s website press release on January 31, 2023, LOTTE Chemical Titan Holding Berhad (LCT), announced its fourth quarter financial results ended 31 December 2022 (4Q FY2022). Revenue of LCT Group in 4Q FY2022 declined by 23% year-on-year (YoY) from RM2.68 billion to RM2.07 billion due to lower average product selling price and sales volume. The Group registered a net loss of RM326.0 million in 4Q FY2022 compared to a net profit of RM168.0 million in the same period last year mainly due to:
- The decline in margin spread amid weakened market demand resulting from volatile external environment, such as elevated inflation, higher interest rates and Russia-Ukraine crisis;
- Increase in foreign exchange losses by RM32.7 million;
- Share of loss from LOTTE Chemical USA Corporation (LC USA) of RM6.4 million; partially offset by
- A reversal of royalty expense charged in 1HFY2022 due to a net loss for the financial year and a reversal of an inventory write down to its net realisable value of RM15.2 million.
In the financial year ended 31 December 2022 (FY2022), the Group’s revenue increased by 2% YoY from RM9.83 billion to RM10.02 billion due to higher average product selling price. However, the Group recorded a net loss of RM728.6 million for the financial year due to similar factors as follows:
- Significant decline in margin spread;
- Inventory write down to net realisable value;
- Foreign exchange losses; and
- Lower share of profit from LC USA
President and CEO, Mr Park Hyun Chul commented, ‘2022 was a year of unprecedented challenges with the world facing major global events such as war, inflation and recession fears. These external factors have weakened global economic activities and negatively affected the demand for petrochemical products in the region. The outlook of the Company is expected to remain challenging in the near term in view of the market situation. However, the management has implemented the optimisation plan by balancing our production outputs and economic efficiencies. We have also conducted rigorous cost management and financial liquidity to ensure the financial positions of the Group remained healthy. As at 31 December 2022, the Group has a cash and bank balances of RM1.32 billion. To reward our shareholders for their continued and unwavering support, LCT had declared a special dividend of 13.98 sen per share which amounted to a dividend payout of RM318.4 million on 24 November 2022.
‘As part of LCT’s strategy to deliver sustainable growth to its stakeholders, we commenced the construction of the LOTTE Chemical Indonesia Ethylene (LINE) Project in January 2022, and the project is slated for completion in 2025. Upon completion, the LINE Project will strengthen our market presence in the petrochemical industry with a 65% increase in our total production capacity. Furthermore, Indonesia is a net importer of petrochemical products. The project will enable us to capitalise on the anticipated increase in demand for our products in the country,’ added Mr Park.
LCT holds an effective equity interest of 51% in PT LOTTE Chemical Indonesia (LCI), the owner of the LINE Project, while LOTTE Chemical Corporation (LCC) holds the remaining 49%. The project will be funded by approximately 40% equity and 60% bank borrowings. As at 6 January 2023, LCT and LCC had completed their portion of equity injection of USD1.6 billion into LCI.
On greenhouse gas (GHG) emission and climate change, LCT is measuring its GHG baseline and planning to develop a Carbon Emission Management Roadmap in 2023 to achieve its carbon neutrality.
‘In terms of our corporate governance, the Company has recently been awarded the Industry Excellence Award for Corporate Governance Disclosure at the Minority Shareholders Watch Group (MSWG)-ASEAN Corporate Governance Award 2021 for the second consecutive year and was ranked 20th out of 100 public listed companies across all sectors. The Company has also won the 2021 ASEAN Corporate Governance Scorecard Award under the ASEAN Asset Class PLCs category. The accolades are a testament to the Company’s unwavering commitment to uphold strong corporate governance and to materialise its Vision to become a Top-Tier Petrochemical Company in Southeast Asia,’ stated Mr Park.
About LOTTE
Chemical Titan Holding Berhad LOTTE Chemical Titan Holding Berhad (LCT or Company) is the subsidiary of LOTTE Chemical Corporation under the LOTTE Group. Established in 1991, the company is Malaysia’s first standalone polyolefins producer and one of the largest integrated olefin and polyolefin producers in Malaysia and Southeast Asia.
LCT aims to create a better world and cater to the needs of people by enhancing their quality of life. LCT produces two principal product categories: olefins & other derivatives and polyolefins. The company is in people’s everyday life as polyolefins, which comprise polyethylene (PE) and polypropylene (PP), are the most basic building blocks in the plastic fabrication industry. PE and PP are common materials for producing products ranging from daily necessities, e.g. electrical appliances, consumer packaging, and household products, to industrial materials, e.g. automotive parts, textile, general industrial applications, healthcare, and agricultural products.
LCT’s production site in Malaysia consists of 12 plants located on two sites in Pasir Gudang and Tanjung Langsat, Johor, and owns a 40% stake in LOTTE Chemical USA Corporation in Houston, Texas. As the company is poised to be the top-tier petrochemical company in SouthEast Asia (SEA). In 2006, it expanded its regional footprint with 3 polyethylene plants in Indonesia through the subsidiary, PT LOTTE Chemical Titan Nusantara. The company has also commenced the construction of the LOTTE Chemical Indonesia New Ethylene (LINE) Project in Indonesia in first quarter of 2022, and the completion of the project is expected in the year 2025.
For any media enquiries, kindly contact:
Benjamin Poh
Communications
Email: benjaminpoh@lotte.net
Tel: +603 2089 5545 / +6019-224 9282
