Lotte Chemical posted sales of 5.69 trillion won ($4.01 billion) and operating profit of 110.1 billion won in the second quarter, the company announced Friday. The results marked a turnaround from a loss in the same period last year and extended the company's profit streak to two consecutive quarters.
By business segment, the basic materials division recorded sales of 3.94 trillion won and operating profit of 2.3 billion won, while the advanced materials division posted sales of 1.16 trillion won and operating profit of 132.5 billion won.
The basic materials segment saw profitability decline due to a raw-material lagging effect stemming from supply chain uncertainty caused by the war in the Middle East. Advanced materials, however, improved profitability on the back of wider spreads on key products and a favorable exchange rate. Lotte Chemical said it plans to optimize production operations in both segments and strengthen business competitiveness in the third quarter as well.
The basic materials business is undergoing a government-led restructuring of the petrochemical industry. The Daesan factory, set to merge with HD Hyundai Chemical into a combined entity in September, completed its spin-off process in June. The Yeosu factory, slated to merge with Yeocheon NCC, received government approval for its business restructuring in July and is currently in talks with related companies.
Lotte Fine Chemical recorded sales of 586.3 billion won and operating profit of 61.9 billion won, driven by strong sales volume and a favorable exchange rate. Lotte Chemical said it will continue investing in high-value materials businesses with strong growth potential, including semiconductor materials and pharmaceutical and food-grade materials.
Lotte Energy Materials posted sales of 954.2 billion won and an operating loss of 16.9 billion won. While sales volume increased, profitability fell as a lagging effect from the previous quarter weighed on results. With demand for AI applications and battery foil on the rise, sales volume is expected to keep growing in the third quarter. At its Malaysia facility, the fifth factory began operations in July, and the sixth is scheduled to come online before the end of the year.
Lotte Energy Materials plans to strengthen its specialty business centered on functional materials, using its Yulchon compounding factory — targeting completion and commercial operation this year — as a base. The company aims to expand compounding materials production capacity, increase the share of high-value products such as super engineering plastics, and upgrade its overall business portfolio.
Lotte Chemical said it is "steadily pursuing competitiveness enhancement through business restructuring, upgrading its business portfolio toward high-value-added products, nurturing future growth businesses, and improving its financial structure, all amid uncertainty in the domestic and external business environment surrounding the petrochemical industry." The company added that it "will continue to respond flexibly to market changes, build a foundation for sustainable growth, and enhance corporate value."
klee@heraldcorp.com
