,LCT’s year-to-date operating performance improved to 87% from 76% a year ago last year, as the company undertook a major statutory plant turnaround for 10 of its total twelve Malaysian plants in early 2020.
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KUALA LUMPUR: Lotte Chemical Titan Holdings Bhd’s (LCT) net profit jumped 330% to RM382.29mil in the second quarter ended June 30, 2021 from RM88.72mil a year ago boosted by higher product margin spreads.
In a filing with Bursa Malaysia on Wednesday, it said revenue increased by 61.2% to RM2.54bil from RM1.57bil. Earnings per share were 16.81 sen compared with 3.9 sen a year ago.
“The notable improvement is mainly attributable to the substantially higher product margin spreads seen from a year ago. The strong quarterly performance is achieved amidst the volatile global business environment due to the ongoing Covid-19 pandemic and various movement restriction measures,” it said.
LCT president & CEO Park Hyun Chul said following the surge in after tax profit, earnings before interest, tax, depreciation and amortisation (Ebitda) more than doubled to RM585mil from the RM262mil a year ago.
He said operating profit surged 274% to RM445mil from RM119mil a year ago.
“LCT also generated much stronger operating cash flows of amounting to RM 1bil for the first half of 2021 comparing to RM512mil generated in the corresponding year period. The stellar performance improvement even amidst the challenging business environment is remarkable,” he said.
The strong profitability improvement was mainly attributable to the much higher product average selling prices (ASP) relative to the rising naphtha feedstock costs in 2021, in line with global Brent crude oil prices.
Polymer product ASPs have experienced strong upward price momentum since bottoming at around US$800 a tonne in the 2Q last year during the height of the global pandemic.
The ASPs were about US$1,300 a tonne in 2Q 2021, maintaining the price levels seen during the first quarter.
Its two key products, the low-density polyethylene (LDPE) and polypropylene (PP), which comprised of about 53% of the company’s total polymer capacity, are still recording relatively healthier margins, to-date.
LCT’s year-to-date operating performance improved to 87% from 76% a year ago last year, as the company undertook a major statutory plant turnaround for 10 of its total twelve Malaysian plants in early 2020.
It will conduct statutory plant turnaround for the remaining two plants in Malaysia in the 3rd quarter of 2021.
It has also provided group operating rate target of about 85% for 2021, which is higher than the 82% operating rate recorded in 2020
In the first half, its net profit was RM822.29mil compared with net loss of RM81.34mil in the previous corresponding period. Its revenue increased by 61.5% to RM4.91bil from RM3.04bil.
“The huge turnaround in its business performance is primarily attributable to rising product ASPs which has boosted key earnings for the company. In addition, the company’s performance is further supported by performance turnaround in its U.S associate’s operations on the back of improved operating performance driven by higher ASP for MEG product,” it explained.