Lotte Chemical posts fifth straight quarterly operating loss in Q2

 South Korea’s Lotte Chemical Corp. has posted an operating loss for a fifth straight quarter due to sluggish petrochemical demand.

The company said on Wednesday its second-quarter operating loss on a consolidated basis reached 77 billion won ($58.4 million), widening from a loss of 59.5 billion won in the year-earlier period.

The shortfall also ballooned from the first quarter’s loss of 26.2 billion won.

Second-quarter sales declined 5.9% year on year to about 5 trillion won. Net loss stood at 14.03 billion won.

Lotte attributed the weak performance to lower petrochemical prices, triggered by reduced demand, and inventory valuation losses.

Faltering demand for petrochemical products, coupled with falling oil prices, weighed on the bottom line, the company said.

Lotte Chemical produces basic chemicals, such as polyethylene and ethylene, used in plastics and industrial chemicals.

The second-quarter results include the 1.5 billion won operating loss registered by its new copper foil-making subsidiary, Lotte Energy Materials Corp., launched in March following its takeover by Lotte Chemical.

Lotte Energy Materials booked 198.2 billion won in revenue, up 5.2% from a year earlier.

To improve its profitability in the coming quarters, Lotte Chemical said it plans to reduce the proportion of general-purpose products where competition is intensifying in the basic material business and increase the output of value-added products such as solar materials and polymers for secondary battery separators.

Write to Mi-Sun Kang at misunny@hankyung.com