Lotte Chemical swings to red in the fourth quarter of last year

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Lotte Chemical swings to red in the fourth quarter of last year

Published: 09 Feb. 2023, 18:21

Lotte Chemical Vice President Kim Gyo-hyun talks at a press conference Thursday. [YONHAP]

Lotte Chemical swung to red in the fourth quarter of last year, impacted by a rise in global oil prices and sluggish demand for petrochemicals.

The chemical company reported 80.6 billion won ($64 million) in net loss in the fourth quarter compared to 62 billion won of net profit in the same quarter in 2021.

It fell short of the market consensus of 60.4 billion won of net loss compiled by FnGuide.

Operating loss came to 395.8 billion won, turning from a profit of 29 billion won the previous year, dipping below the market forecast of 125.1 billion won of operating losses.

Quarterly revenue rose 6.5 percent to 5.5 trillion won, still missing the market expectation.

"Profitability was hit hard by economic uncertainties such as China's Covid-19 lockdowns, the lingering Russia-Ukraine war and deteriorating demand, as well as the increase in raw material prices," Lotte Chemical said in a statement.

Yearly, net profit plunged 97.1 percent to 41 billion won. It turned to an operating loss of 758 billion won from 1.5 trillion won while revenue was up 23 percent to 22.3 trillion won.

The basic materials segment, mainly the naphtha cracking business, saw an operating loss of 285.7 billion won, with sales reaching 3.16 trillion won.

Its advanced materials sector, which includes construction and interior materials, generated 32 billion won in operating profit, and sales stood at 1.79 trillion won.

Lotte Chemical said it will continue its drive for a green transition, with a focus on expanding its business portfolios into battery materials and hydrogen.

Its acquisition of Iljin Materials will likely be finalized in February. Last year, it announced it will acquire 53.3 percent of the copper coil manufacturer for 2.7 trillion won.

Copper foil is a core component in making anodes, which are used in lithium-ion batteries for EVs.

Lotte Chemical shares closed up 0.58 percent to 174,200 won Thursday.

BY SARAH CHEA [chea.sarah@joongang.co.kr]