By: AZEE Securities (Pvt) Limited
In our today’s morning report we will present result preview of Lotte Chemical Pakistan Limited (LOTCHEM) for 1HCY14 on August 26, 2014.
LOTCHEM likely back to profit in 2QCY14
After dismissal performance in 1QCY14, LOTCHEM likely to post profit after taxation of Rs 197 million (EPS: Rs 0.13) for the 2QCY14 against loss after taxation Rs 513 million (LPS: Rs 0.34) in same period last year owing to improvement in primary margins of $118/ton in 2QCY143 and dividend income form Lotte Powergen (Private) Limited.
Cumulative losses to continue
On cumulative basis we expect company to post loss after taxation of Rs 316 million (LPS: Rs 0.21) for the 1HCY14 against loss after tax of Rs 423 million (LPS: Rs 0.28) in 1HCY13 due to lower primary margin of $86/ton in 1HCY14 and higher administrative expenses.
Net sales expected to drop by 7%
Revenue likely to decline by 7% at Rs 24.12 billion against Rs 25.89 billion during 1HCY13 owing to lower PTA prices which decreases by 7% to $1,151/ton in 1HCY14. However, PTA volumetric sales surge by 2% to 227k tons in 1HCY14 versus 223k tons in 1HCY13 owing to 22 days planned shutdown for the plant in Jan-Feb 2013. Company would post gross loss of Rs 405 million against gross loss of Rs 568 million in 1HCY13 likely due to lower average primary margin.