Lotte Chemical Titan reports RM1.2bil net loss in FY24, sees tough outlook

PETALING JAYA: Lotte Chemical Titan Holding Bhd (LCT) is expecting the global macroeconomic environment to remain volatile in the near term, with challenges persisting due to ongoing 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.

LCT reported a revenue of RM7.4bil for the year ended Dec 31, 2024, down 3% from RM7.6bil in 2023, primarily due to lower sales volumes despite a higher average product selling price.

The group reported a loss before interest, taxation, depreciation, and amortisation (LBITDA) 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.

LCT said the widening in losses was 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 stands at RM863mil.

“The quarterly impairment assessment indicated an asset impairment of RM940mil for 2024 in accordance with Accounting Standard Malaysian Financial Reporting Standards (MFRS) 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 the fourth quarter ended Dec 31, 2024, LCT reported a revenue of RM1.8bil and a net loss of RM510mil, significantly higher than the RM186.5 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 do 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 will continue to closely monitor market dynamics and provide updates on the project's progress accordingly.