By: Azee Securities Private Limited
In our today morning report we would discuss the performance of Lotte Chemical Pakistan Limited (LOTCHEM) during the 9MCY15.
Losses decrease by 41% YoY: Lotte Chemical posted loss after taxation of Rs 505 million (LPS: Rs 0.33) for 9MCY15 against Rs 853 million (LPS: Rs 0.56) in same period last year mainly due to relatively better primary margin comparing previous year but still below breakeven level. However, in 3QCY15 company loses increase by 16% YoY to Rs 268 million (LPS: Rs 0.18) versus Rs 230 million (LPS: Rs 0.15) in 9MCY15 due to lower primary margins of $80ton in 3QCY15 versus $88/ton in 3QCY14.
Sharp decline in PTA prices drag revenue: Net sales of the company register drop by 32% at Rs 25.63 billion as against Rs 37.67 billion during 9MCY14 on account of lower average Purified Terephthalic Acid (PTA) prices which decreased by 34% to $735//ton in 9MCY15 against $1,116/ton in 9MCY14. Similarly, volumetric sales fall by 1% to 346k tons versus 348k tons in 9MCY14.
Lower primary margin causes gross loss: Company incurred gross loss of Rs 205 million against Rs 620 million in 9MCY14 due to relatively lower primary margin of PTA-PX. Primary margin increased by 19% YoY to $87/ton versus $73/ton in 9MCY14. Other income drop by 21% to Rs 71 million compared to Rs 90 million in 9MCY15 mainly due to lower mark-up on bank deposits.