"Investment Costs to Be Reduced by More Than 1 Trillion KRW Compared to Last Year"
Lotte Chemical recorded an operating loss approaching 900 billion KRW last year due to the impact of sluggish demand and economic downturn. The cumulative losses over the past three years have reached 2 trillion KRW. The company plans to proceed with additional fundraising while reducing investment costs by more than 1 trillion KRW compared to the previous year.
On the 7th, Lotte Chemical announced through its earnings disclosure that it posted sales of 20.4304 trillion KRW and an operating loss of 894.8 billion KRW last year. Sales increased by 2.4% compared to the previous year, but operating profit decreased by 157.3%, widening the deficit compared to the previous year (operating loss of 347.7 billion KRW). Following operating losses of 762.6 billion KRW in 2022 and 347.7 billion KRW in 2023, the company has struggled consecutively, with cumulative losses over the past three years exceeding 2 trillion KRW.
Lotte Chemical explained, "Due to global oversupply and economic recession, the recovery of demand has been delayed, and the depth of the petrochemical business downturn and the uncertainty of the recovery timing continue." It added, "Under these external conditions, sales increased compared to the previous year, but operating profit and net profit saw an expanded deficit." Furthermore, it clarified, "However, net profit included one-time costs such as impairment losses, which are accounting losses recognized but do not involve actual cash outflows."
This year, the company expects gradual improvement in business conditions due to reduced raw material prices and transportation costs, the impact of exchange rates, and global demand expansion factors such as economic stimulus policies. It also plans to focus on innovation activities to secure core business competitiveness, improve profitability, actively pursue business portfolio transformation by expanding high-value-added specialty products, and ensure financial soundness.
The company stated, "We will promote asset-light strategies across non-core assets and conduct sales to reduce the proportion of commodity businesses, while keeping various methods open for review to secure additional efficiency and competitiveness."
Additionally, to secure the core business competitiveness of Lotte Chemical group affiliates, dedicated organizations will be established for each company to lead innovation activities, aiming to enhance profitability and improve operational efficiency through performance-driven task discovery and execution.
To ensure financial soundness, the company will proceed with stable fundraising and reduce investment costs by more than 1 trillion KRW compared to the previous year. New investments will be reconsidered from a conservative perspective, and investment management will be conducted within EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
Furthermore, Lotte Chemical announced that it has decided on a cash dividend of 1,000 KRW per common share as a year-end dividend, which will be finalized at the regular shareholders' meeting in March. In July of last year, the company paid an interim dividend of 1,000 KRW per share to enhance shareholder value.
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