Lotte Chemical Posts 126.6 Billion Won Operating Loss in Q1, Narrows Deficit

Basic Materials Remain in the Red...
Advanced Materials Maintain Profitability

Lotte Chemical posted an operating loss of 126.6 billion won in the first quarter of this year. However, the loss narrowed by 107.5 billion won compared to the previous quarter and by 8.7 billion won compared to the same period last year, raising expectations that the company may have passed the bottom of its performance.

On May 13, Lotte Chemical announced its provisional first-quarter results, reporting sales of 4.9018 trillion won and an operating loss of 126.6 billion won. The company explained that the improvement in spread (the price gap between products and raw materials), enhanced production efficiency, and favorable exchange rates were the main factors behind these results.

By segment, the basic chemicals division recorded sales of 3.3573 trillion won and an operating loss of 107.7 billion won. This includes the performance of Lotte Chemical's basic materials business, LC Titan, LC USA, and Lotte GS Chemical. Although there were some operational disruptions due to a power outage at the Daesan plant in Seosan, South Chungcheong Province, the decline in raw material prices and cost reductions helped reduce the losses. Regular maintenance is scheduled for the Daesan plant and overseas subsidiaries in the second quarter.

The advanced materials division achieved relatively solid results with sales of 1.1082 trillion won and an operating profit of 72.9 billion won. Recovery in demand, lower transportation costs, and exchange rate effects contributed positively. The company plans to continue investing to strengthen competitiveness, including at the Yulchon compounding plant.

Lotte Fine Chemical posted sales of 445.6 billion won and an operating profit of 18.8 billion won, with strong sales of major products driving the performance. In contrast, Lotte Energy Materials recorded sales of 158 billion won and an operating loss of 46 billion won, reflecting sluggish results. The slowdown in the electric vehicle market and inventory adjustments by client companies had an impact.

A Lotte Chemical official stated, "Despite uncertainties such as war and U.S. tariff issues, we are focusing on improving profitability by responding to changes," and added, "We will continue efforts to enhance financial soundness by expanding our portfolio centered on high value-added products."