Lotte Chemical (011170.KS) continued its earnings recovery in the second quarter, returning to an operating profit alongside higher revenue.
The company reported second-quarter revenue of 5.6864 trillion won and operating profit of 110.1 billion won, according to a regulatory filing on the 7th. Revenue rose 39.2% from a year earlier, while operating profit swung to a profit. Compared with the first quarter, revenue increased 13.9% and operating profit rose 49.9%.
"These results came from production optimization and profitability-focused business operations, even amid global supply chain uncertainty caused by geopolitical issues in the Middle East," a company official said.
By segment, basic chemicals, which includes the basic materials business, LC Titan, LC USA, and Lotte Daesan Petrochemical, posted revenue of 3.9403 trillion won and operating profit of 2.3 billion won. Profitability declined from the previous quarter due to the impact of scheduled maintenance and lagging effects.
Advanced materials, by contrast, recorded revenue of 1.1551 trillion won and operating profit of 132.5 billion won. Profitability improved on wider spreads for key products and foreign exchange effects.
Subsidiary Lotte Fine Chemical improved its earnings, posting revenue of 586.3 billion won and operating profit of 61.9 billion won, supported by rising international prices for key products, foreign exchange effects, and higher sales volumes.
Lotte Energy Materials recorded revenue of 194.2 billion won and an operating loss of 16.9 billion won. Although sales volumes increased, profitability declined as one-off factors, such as the positive lagging effect from the previous quarter, disappeared.
Lotte Chemical is accelerating its business structure innovation and expansion into high-value-added businesses. The Daesan plant, which was spun off in June, is set to launch an integrated corporation in September, and the Yeosu plant is also in discussions to establish an integrated operating system. In addition, the company plans to strengthen its specialty businesses, including super engineering plastics, through the Yulchon compounding plant, which is scheduled for completion within the year.
"Amid uncertainty in the internal and external business environment surrounding the petrochemical industry, we are steadily pursuing competitiveness enhancement through business restructuring, advancement of a high-value-added-focused business portfolio, cultivation of future growth businesses, and improvement of our financial structure," Lotte Chemical said. "We will continue to respond flexibly to market changes and build a foundation for sustainable growth to raise corporate value."
