KUALA LUMPUR: Lotte Chemical Titan Holding Bhd said the damage caused to its new TE3 Project due to the recent fire incident was minimal and estimated losses of not more than RM50,000 to replace burnt cables.
In an announcement to the stock exchange, the company said it had completed its assesment of the fire incident that occured at its PP3 expansion plant in Pasir Gudang, Johor on Sept 20.
Last week, Lotte Chemical shares were hit following news of the incident, with the share price going as low as RM5.04 a share.
The share price improved to close at RM5.25 on Monday.
“The fire was due to contact between residual vapor from the Quench Water drain pit and the steam line.
“There is no damage to the other plants and they are running normally,” the company said in the filing.
It said it had resumed the preparation of the TE3 Project for commissioning and the commercial startup is on target by the fourth quarter 2017.
The company said the incident was not expected to have a material effect on the earnings, net assets and gearing of the company and the group for the financial year ending December 31, 2017.
Maybank Investment Bank Research maintained its Buy call on the counter, as well as its earnings forecasts and target price of RM7.85 following the update from the company.
It said the market would be comforted by the revelation of the announcement and look beyond the incident.
“The focus will resume to the recent surge in crude oil prices and the likelihood for petrochemical prices to track crude oil prices.
“We believe the share price will react positively as the company is a direct beneficiary of higher petrochemical prices,” it said.