Lotte Chemical posts deficit for second straight quarter

Lotte Chemical on Tuesday announced that it suffered 423.9 billion won ($308 million) in operating loss on a consolidated basis in the third quarter, its second-straight quarter of posting a deficit following a red figure of 21.4 billion won in the previous quarter.

Sales from July through September rose 27.9% from the same period last year to 5.6 trillion won, but the company said lower global demand and falling prices for the raw material naphtha led to a drop in profitability due to the negative lagging effect, or a time difference in raw material input.

Net losses in the third quarter posted 31.1 billion won, falling into the red after posting surpluses in the same quarter last year and the previous quarter this year. By sector, basic materials recorded operating losses of 277 billion won from sales of 3.5 trillion won.

Lotte Chemical completed regular maintenance of its plant in Yeosu, South Jeolla Province, and started operations at new facilities, but profitability declined despite sales growth.

The core materials unit posted 12.1 billion won in operating profit on sales of 1.1 trillion won. Lotte Chemical Titan suffered operating losses of 130.8 billion won and the American affiliate Lotte Chemical USA 30.6 billion won.

On its prospects for the year's final quarter, Lotte Chemical said, "We expect difficult business conditions due to the global recession and weak demand from downstream sectors, but also anticipate greatly improved profitability thanks to the stable downward trajectory of raw material prices."

"We will actively seek to expand our portfolio of high value-added products and shifts in business fundamentals, as well as quickly and resolutely invest in new businesses such as hydrogen energy, battery materials and recyclable bioplastics."

Write to Seo-Woo Jang at suwu@hankyung.com