Lotte Chemical’s profit plunges 50% in 2023

Lotte Chemical Pakistan Limited (LOTCHEM), a subsidiary of South Korean chemical giant Lotte Chemical Corporation (LCC), saw its profit-after-tax (PAT) plunge by 50%, clocking in at Rs5.08 billion in 2023 compared to PAT of Rs10.12 billion in 2022.

The profit decline is attributed to a decrease in revenue and a rise in the cost of sales.

The Board of Directors (BoD) of the listed company in a meeting held on Wednesday reviewed the financial performance of the company for the period ended on December 31, 2023.

During the meeting, the BoD announced a final cash dividend of Rs1 per share.

As per the latest financials, the company’s earnings per share (EPS) stood at Rs3.35 per share, against Rs6.68 per share in SPLY.

LOTCHEM’s net revenue decreased by nearly 19% to Rs81.62 billion in 2023, as compared to Rs100.27 billion recorded in the previous year.

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Consequently, the company’s gross profit stood at Rs10.24 billion in 2023, as compared to Rs17.82 billion, a drop of 43%. LOTCHEM’s profit margin reduced to 12.5% in 2023, in comparison to 17.8% in 2022.

During the period, the company’s administrative expenses increased by 9%, reaching Rs654.4 million in 2023, as compared to Rs602.5 million in SPLY.

LOTCHEM’s other income stood at Rs2.57 billion in 2023, up by 39% as compared to Rs1.84 billion in 2022.

Consequently, the company’s registered a profit before tax of Rs9.51 billion in 2023, as compared to Rs15.76 billion in 2022, a fall of 40%.

During the period, the chemical maker paid taxes to the tune of Rs4.43 billion, as compared to Rs5.64 billion in 2022.

The company’s effective tax rate stood at 47% in 2023, as compared to 36% in SPLY.

Lotte Chemical Pakistan Limited was incorporated in Pakistan on 30 May 1998 under the Companies Ordinance, 1984. The principal activity of the Company is to manufacture and sale of Pure Terephthalic Acid (PTA).