File pic shows Lotte Chemical Titan plant in Johor,
KUALA LUMPUR: Lotte Chemical Titan Holding Bhd
posted a third quarter net profit of RM216.89mil, down 5.8% from the same quarter last year as leaner margins cut into earnings.
In a filing with the stock exchange, Lotte said its revenue had grown 19.9% to RM2.42bil from RM2.02bil in the year-ago quarter due to increases in sales volume and selling prices.
"Profit after tax decreased by RM13mil from RM230.1mil to RM217.1mil and this was mitigated by lower income tax expense due to overprovision of deferred tax expenses in prior year," it said.
In the olefins and derivative products segment, new plant capacity and product operation saw revenue jump 91% to RM596.7mil from RM311.4mil in the comparative quarter.
However, profit before tax slowed 31.8% to RM45.9mil.
Similarly in the polyolefin department, revenue rose 6.8% to RM1.82bil in Q3 although profit before tax fell 38% to RM125.3mil.
The group also posted a forex exchange gain of RM18.7mil in the quarter under review after offsetting a foreign exchange loss of RM24.1mil from operations.
This excluded a foreign exchange gain of RM42.8mil arising from a revaluation of the group's US dollars IPO funds against the ringgit held for Indonesia project capital injection.
For the three quarters to Sept 30, 2018, Lotte's net profit rose 13.1% to RM776.11mil from RM686.08mil in the same period last year while revenue grew 21% to RM6.91bil from RM5.71bil.
Earnings before interest, tax, depreciation and amortisation (Ebitda) rose to RM1.15bil from RM1.1bil in the previous corresponding period.
Contributing factors to the higher earnings included an increase in foreign exchange gain, insurance proceeds receivable for gas turbine claim, lower property, plant and equipment write-off as compared to 2017 and other non-operating income.
Lotte said its outlook for the remainder of the year will be influenced by the demand and supply of the petrochemicals market.
"Oil price is expected to increase with the Iran sanction and strong gasoline demand. However, the escalation of trade war between US and China will weaken the global demand and consequently dampen the growth in oil price.
"This uncertainty will result in the volatile fluctuation of crude oil and naphtha prices," it said.
It added that its performance will also hinge on its ability to maximise production outputs and operational efficiency as well as feedstock prices which are correlated to crude oil prices.
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