KUALA LUMPUR: Lotte Chemical Titan Holdings Bhd's (Lotte) net profit shrank 38 per cent year-on-year (YoY) to RM48.84 million in the third quarter (Q3) ended September 30, 2021, from RM78.77 million recorded a year ago.
In an exchange filing today, the petrochemical company said this was dragged by the underprovision of deferred tax expenses resulted from tax adjustment arising from tax audit and certain non-tax deductible expenses.
Its Q3 revenue increased 15.5 per cent to RM2.24 billion from RM1.94 billion on the back of higher average product selling price following firmer feedstock costs.
For the first-nine month period, Lotte returned to the black with a net profit of RM871.14 million, reversing its net loss of RM2.57 million.
Its revenue surged 43.6 per cent to RM7.15 billion from RM4.98 billion recorded in the same period a year ago.
President and chief executive officer Park Hyun Chul said the company was cautiously optimistic on the petrochemical sector outlook amid some balancing market factors weighing in.
"As the sector moves in tandem with economic growth, it would likely be supported by the post-pandemic economic recovery expected for the remaining of the year and continuing in 2022," he said in a separate statement today.
However, he said there were new domestic capacities expected to come online this year, which may have some downward pressure on the polymer average selling prices.
"The positive outlook would be very much dependent on the continuation and effectiveness of vaccination as well as the pace of economic re-opening, globally and domestically.
"We expect certain elements of volatility to remain for the petrochemical sector moving ahead," he added.
Meanwhile, Lotte said demand recovery with easing of lockdown measures coupled with freight constraints and regional supply disruptions had led to firmer footing on the overall product prices.
"As the petrochemical sector moves in tandem with economic growth, it would likely be supported by the overall global economic recovery expected to continue toward the year end and 2022," it added.
The company said it would continue to monitor closely on the pandemic development as the petrochemical market correlates with and would be heavily dependent on the regional and global economic growth and aggregate consumption pattern.
"Notwithstanding the external circumstances, we will continue to maintain its strong financial resilience and optimise our operations to ride through the volatile business environment."
Meanwhile, Lotte has announced a special single tier dividend of 18 sen per share fo rat financial year ending December 31, 2021, payable on November 26, 2021.