By: WE Financial Services Limited
Lotte Chemical Pakistan Limited (LOTCHEM) recently announced its corporate results for half year period ended June 30, 2015 where it continued to suffer from losses in 1HCY15 owing to lower primary margin due to decline in prices of Purified Terephthalic Acid (PTA). The company has witnessed a loss after taxation of Rs237 million (LPS: Rs0.16) in 1HCY15 that is 62% YoY down from a loss after taxation of Rs623 million (LPS: Rs0.41) in 1HCY14. The bottom-line also took a negative impact from decline in other income by 25% and surge in finance cost.
Recovery in 2QCY15 However on the back of improvement in margins, the bottom-line showed recovery on QoQ basis where it earned Rs69 million (EPS: Rs 0.05) in 2QCY15 versus a loss after taxation of Rs 306 million (LPS: Rs 0.20) in 1QCY15. The primary margin of the company increased to $113/ton in 2QCY15 as against primary margins of $86/ton in the previous quarter.
Major dent by lower revenue The net revenue of the company dropped 26% YoY in 1HCY15 to Rs18,277 million versus a net revenue of Rs24,804 million in 1HCY14. This decline in net revenue was attributed to severe decline in the average PTA that came down to $742/ton in during the period under review which is 34.1% YoY down when compared to average prices of $1,126/ton in 1HCY14. The sales volume however marginally rise by 1% YoY to 243k tons in 1HCY15 versus 240k tons in the identical period in CY14.