Lotte posts 3Q net profit of RM48.8mil, declares 18 sen special dividend

KUALA LUMPUR: Lotte Chemical Titan Holding Bhd’s net profit fell 38% to RM48.8mil in the third quarter ended Sept 30 against RM78.7mil in the same quarter a year ago.

Lotte Chemical said the lower net profit was mainly due to the underprovision of deferred tax expenses which is resulted from tax adjustments arising from tax audits and certain non-tax deductible expenses.

Its revenue for the quarter rose 15% to RM2.23bil from RM1.94bil mainly due to the increase in average product selling price following the firmer feedstock costs.

In the first nine months to Sept 30, Lotte Chemical posted a net profit of RM871.14mil against a net loss of RM2.57mil.

At the same time, its earnings before interest, tax, depreciation and amortisation more than tripled to RM1.5bil, from RM485mil booked during the same period last year.

The group’s revenue increased by 44% from RM 4.97bil to RM7.14bil mainly due to the increase in average product selling price (ASP).

“Riding on the back of its stellar performance to-date in 2021, the company has introduced and declared its first-ever special dividend of 18 sen per ordinary share, which amounted to approximately RM410mil distributable dividend to its shareholders,” Lotte Chemical said in a statement.

The special payment, which represents about 50% payout from its earnings, would translate to an attractive yield in excess of 6% based on its share price of RM 2.74, last traded on Oct 27.

This special distribution will be independent of its dividend policy and its Board of Directors upon closing of the financial year will determine the subsequent final dividend payable for FY21.

President and CEO Park Hyun Chul said: “We are cautiously optimistic on the petrochemical sector outlook amidst some balancing market factors weighing in.”

“As the sector moves in tandem with economic growth, it would likely be supported by the post-pandemic economic recovery expected for the remainder of the year and continuing in 2022,” he said.

However, Park said there are new domestic capacities expected to come online this year, which may have some downward pressure on the polymer ASPs.

“The positive outlook would be very much dependent on the continuation and effectiveness of vaccination as well as the pace of economic re-opening, globally and domestically.

“As such, we expect certain elements of volatility to remain for the petrochemical sector moving ahead,” Park said.

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