by PRIYA VASU/ pic by BERNAMA
LOTTE Chemical Titan Holding Bhd has declared a dividend of 3.27 sen per ordinary share for the financial year ended 31 December 2020.
In a filing to Bursa Malaysia today, the company said this will amount to a total dividend payment of approximately RM74.3 million representing a 50% payout ratio on its profit after tax and minority interests (PATAMI) for FY2020.
“We always seek to reward our shareholders by paying a consistent annual dividend payout ratio, which we have been maintaining over the past three years.
Our dividend payment is always in-line with our performance for the period. In addition, we are implementing the Dividend Reinvestment Scheme (DRS) for this final dividend to allow our shareholders an option to reinvest their dividend in new LCT shares,” added Lotte Chemical.
The Company was able to achieve PATAMI of RM148.6 million for FY2020 in spite of recording significant net loss during the 1st quarter of FY2020 amid plunging product average selling prices (ASP) at the onset of the COVID-19 pandemic, which led to severe profit margin compression during the period.
LCT posted a strong PATAMI of RM151.2 million during the 4th quarter of FY2020.
It also successfully completed a major statutory plant turnaround for its Malaysian complex in the 1st half of 2020 during the pandemic lockdown period.
In 2021, the company is expecting an improved overall outlook for the petrochemical industry as its key polymer products have seen surging prices since 4th quarter 2020 and into the first two months in 2021.
Market polymer ASPs fell to around USD 800/MT in the 2nd quarter and saw notable increases to USD 1,100/MT in the 4th quarter of 2020.
The uptrend is continuing with ASPs reaching above USD 1,200/MT for the first two months of 2021.
The company has noted that in particular, two of its key products, namely the
low-density polyethylene (LDPE) and polypropylene (PP), are currently fetching significantly higher ASP of around USD 1,550/MT, as at end February 2021.
The strong prices are expected to hold or increase further in the 1st half of 2021 buoyed by the brightening economic recovery prospect with global vaccination rollouts, complemented with the sudden polymer supply shortages in the SEA region resulting from the on-going shipping container issues which curtailed imported polymer supplies from other regions.
“At the same time, the deep freeze storm in the U.S in February has affected operations in the key production hub in Texas which significantly reduced U.S supplies, which is one of the key petrochemical producers,” added LCT.
It said that the SEA region may also experience further supply disruption due to outages and expected plant turnarounds in Asia and key Middle East producers in the 1st half of 2021.