by ANIS HAZIM / pic TMR FILE 

LOTTE Chemical Titan Holding Bhd earnings in the first quarter ended March 31, 2022 (1QFY22) declined by 76.36% year-on-year (YoY) to RM103.99 million mainly due to the drop in gross profit margin resulting from 64% increase in feedstock costs and the lower foreign exchange differences of RM1.1 million from RM 21.7 million. 

In a filing to Bursa Malaysia yesterday, Lotte noted that the decrease in profit was partially offset by share of profit from the associated company, Lotte Chemical USA Corp (LC USA) of RM 68.1 million of which RM45.7 million was a one-off gain on disposal of investment after tax. 

The company’s revenue grew 16.52% to RM2.75 billion in 1QFY22 from RM2.36 billion in 1Q21 due to the increase in average product selling price. 

Its earnings per share declined to 4.57 sen versus 19.36 sen in 1Q21. 

Lotte noted that the results of its operations for FYE22 are expected to be primarily influenced by several factors.

In its exchange filing yesterday, the company stated that the Russia-Ukraine conflict has caused volatility in crude oil prices while the progress of the relaxation of Covid-19 policies in Malaysia and South-East Asia’s region are factors impacting its prospects.

It added that demand-supply balance of petrochemical products in the market, as well as its ability to optimise production outputs and economic efficiencies will determine its immediate financial performance. 

“Amid current market uncertainties, the company will continue to monitor closely the developments of the global economic growth, as well as aggregate consumption patterns which correspond to the prospect of the petrochemical market,” Lotte added. 

Lotte’s share price closed 1.77% or four sen lower to RM2.22 yesterday, valuing the company at RM5.13 billion.