Lotte Chemical Pakistan Limited was incorporated in Pakistan on May 30, 1998. The principal activity of the company is to manufacture and sale Pure Terephthalic Acid.
Lotte Chemical is the only world-class manufacturer and supplier of Purified Terephthalic Acid (PTA) in Pakistan with a capacity to deliver 500,000 tonnes every year through its state-of-the-art plant at Port Qasim, Karachi.
Lotte’s revenue for the quarter ended September 30, 2021 was higher than the corresponding period last year, mainly due to higher PTA price.
The company generated a gross profit of Rs1.394 billion for the quarter, compared with the gross profit of Rs1.34 billion during the same period of the last year.
The earnings per share (EPS) for the quarter stood at 41 paisas/share, compared with 63 paisas/share for the third quarter of 2020.
The distribution and selling expenses were 4 per cent lower than the corresponding quarter last year. similarly, the administrative expenses were 12 per cent higher than the corresponding period of the last year due to the overall impact of inflation.
The taxation charge for the quarter is based on statutory income tax rate and tax under Final Tax Regime (FTR) as adjusted by the movement in the deferred tax account.
Moving forward, crude oil (WTI) prices are expected to trend downwards, as pressure mounts on Opec+ to keep the rising prices in check by increasing the output. Additionally, we expect the refineries at the Gulf of Mexico to resume normal operations soon, which may help stabilise the prices.
However, continued improvement in the global oil demand may restrict any significant downward movement in prices.
The Paraxylene market is expected to remain downbeat, as capacity additions in China and Saudi Arabia will further increase the supply in the market. Additionally, no foreseeable upside in demand would further weigh on the prices.
The PTA demand is expected to remain weak in the last quarter of 2021, as downstream industries are forced to comply with China’s dual control policy. However, producers are expected to resist a drastic reduction in the price, as high co-feedstock, acetic acid prices are adding pressure to the existing near breakeven margins.
