By: Azee Securities Pakistan Private Limited
In our today morning report we would discuss the performance of Lotte Chemical Pakistan Limited (LOTCHEM) during the 1HCY15 and would give our recommendation over the scrip.
Losses continues in 1HCY15, but marginal recovery in 2QCY15 Lotte Chemical posted loss after taxation of Rs 237 million (LPS: Rs 0.16) for 1HCY15 against Rs 623 million (LPS: Rs 0.41) in same period last year mainly due to lower primary margin. However, in 2QCY15 company showed recovery with marginal earning of Rs 69 million (EPS: Rs 0.05) versus Rs 306 million (LPS: Rs 0.20) in 1QCY15 due to revival in primary margins of $113/ton in 2QCY15 versus $86/ton in 1QCY15
Revenue down 26% Net sales of the company register drop by 26% at Rs 18.27 billion as against Rs 24.80 billion during 1HCY14 on account of lower average Purified Terephthalic Acid (PTA) prices which decreased by $742//ton in 1HCY15 against $1,126/ton in 1HCY14. However, volumetric sales surge by 1% to 243k tons versus 240k tons in 1HCY14.
Other income drop by 25% Other income decrease by 25% to Rs 49 million compared to Rs 66 million in 1HCY14 mainly due to lower income from bank deposit. Finance costs were higher than the corresponding period last year mainly due to the adverse impact of Pak rupee against US$.