The company said the unpredictable conditions were driven by fluctuations in oil prices and average selling prices.
PETALING JAYA: Lotte Chemical Titan Holding Bhd
is expecting the global macroeconomic environment to remain volatile in the near term, with challenges persisting due to uncertainties in the demand and supply of products and supply chain for petrochemicals.
It said the unpredictable conditions were driven by fluctuations in oil prices and average selling prices.
Releasing its financial results for the fourth quarter ended Dec 31, 2024 (4Q24), along with full-year results for 2024, it reported that revenue for the year was at RM7.4bil, down 3% compared with RM7.6bil in 2023, primarily due to lower sales volumes despite increased average product selling price.
The group reported a loss before interest, taxation, depreciation, and amortisation for the year of RM816mil and a net loss of RM1.2bil, which widened from a net loss of RM780.3mil in 2023, driven by impairment loss, higher losses from an associate company, foreign exchange impact, and increased finance costs.
“The results were mainly caused by geopolitical events, such as the Russia-Ukraine War, and tensions in the Middle East.
“Additionally, sluggish economic performance and the oversupply of petrochemical products in China have affected supply and demand balances,” it said in a filing with Bursa Malaysia.
Lotte Chemical said the widening losses were offset by a foreign exchange gain of RM470mil from the dissolution of a subsidiary whose functional currency previously was denominated in US dollars.
Excluding the impairment and foreign exchange gain, the group’s loss from operations for 2024 stood at RM863mil.
“The quarterly impairment assessment indicated an asset impairment of RM940mil for 2024 in accordance with Accounting Standard Malaysian Financial Reporting Standards 136.
“The reasons for this impairment are, on one hand, ongoing uncertainties in the business environment, and on the other, the volatility of raw material and average selling prices,” it said.
For 4Q24, Lotte Chemical reported a revenue of RM1.8bil and a net loss of RM510mil, significantly higher than the RM186.5mil net loss seen in the corresponding quarter a year ago.
It said revenue decreased year-on-year due to depreciation of the US dollar against the ringgit despite higher sales volume.
President and chief executive Jang Seon Pyo said valuation adjustments, in accordance with Malaysian Financial Reporting Standards, did not change the strategic focus of the company.
“As external pressures on the industry remain significant, our key priorities for the upcoming year are to sustain operational stability and implement efficient cost management,” he added.
The group said its Lotte Chemical Indonesia New Ethylene project in Merak, Indonesia is on track for completion this year and that its board would continue to monitor market dynamics as well as provide updates on the project’s progress.
