PETALING JAYA: Lotte Chemical Titan Holding Bhd’s prospects look to be brighter after a series of unfortunate events, with its net profit nearly tripling to RM315.03 million in the second quarter ended June 30 (Q2 2018), from RM113.62 million in the previous corresponding quarter.
This is also the company’s second highest quarterly earnings since its listing in July 2017.
On Bursa Malaysia today, the stock gained 13 sen or 2.5% to RM5.29 on 6.0 million shares done.
Lotte Chemical Titan told the stock exchange today that the higher profit was partly attributed to higher sales volume and lower production cost resulting from improvement in plant operational efficiency.
Other factors contributing to the group’s improved profit include higher foreign exchange gain, insurance proceeds from gas turbine claim, reduction of loss on fair value changes and increased in non-operating income.
Lotte Chemical Titan’s revenue was up 28.1% to RM2.28 billion against RM1.78 billion previously, driven by the increase in sales volume which was driven by improvement in production quantity compared with Q2 2017. Its average plant utilisation improved from 71% to 82% in Q2 2018.
For the six-month period, the group’s net profit grew 22.7% to RM559.22 million from RM455.77 million a year ago, while revenue increased 21.6% to RM4.49 billion against RM3.69 billion previously.
On prospects, the group said its FY2018 results are expected to be primarily influenced by the demand and supply balance of petrochemical products in the market, its ability to maximise production outputs and operational efficiency, and feedstock prices, which are correlated to crude oil prices.
It said the oil price is expected to be volatile and will have an impact on the price of naphtha, which is the group’s main feedstock.
In addition, Lotte Chemical Titan said, there is uncertainty in the petrochemical business’ dynamics and regional market due to the ongoing trade war between the US and China.
“Looking forward, the board would like to revise the full-year 2018 operating rate to about 85% due to profit optimisation and general plant maintenance. Barring any unforeseen circumstances, our board expects our performance for FY 2018 to remain positive,” it added.
Source: The Sun Daily