Lotte Chemical Pakistan Limited (LOTCHEM) reported a net profit of PKR 2.66 billion (EPS: PKR 1.76) in 9MCY24. This represents a 45% decline from a net profit of PKR 4.84 billion (EPS: PKR 3.20) in the same period last year (SPLY).
Revenue for 9MCY24 increased by 43% year-on-year to PKR 88.98 billion, compared to PKR 62.14 billion in 9MCY23. The trading of Acetic Acid contributed gross profit of PKR 358 million during 9MCY24. The price of Acetic Acid ranged between $450 and $500 per ton during the period.
LOTCHEM is the sole producer of purified terephthalic acid (PTA) in Pakistan, with an annual production capacity of 500 KT. Approximately 40% of the company’s sales are made to Novatex Limited.
The company’s energy mix comprises 24% RLNG and 76% gas. Gas supply was uninterrupted from the government during the period. The company’s gas requirement is 6–7 mmbtu.
Management plans to rely on K-Electric as a backup electricity source if the government suspends gas supply to captive power plants. The company paid advance taxes based on the assessed taxto-turnover ratio and expects to receive a refund after finalizing this year’s tax liability.
Management reported low production levels, citing challenges stemming from higher interest rates and elevated energy prices, which have impacted their downstream customers. The demand for PTA in the domestic market is estimated at 700 KT. The duty structure for PTA and PX remained unchanged in the FY25 financial budget.
Going forward, management expects demand to recover following the finalization of an energy package for the industry. The company is actively engaging with the government and other stakeholders. Management anticipates sustained PTA margins in the coming year.
Important Disclosures
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