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Lotte Chemical Q3 net more than halves on weak aromatics business

All Headlines 16:44 November 01, 2019

SEOUL, Nov. 1 (Yonhap) -- Lotte Chemical Corp., a major chemical firm in South Korea, said Friday its third-quarter net profit more than halved from a year earlier due largely to a slump in its aromatics business.

Net profit stood at 214 billion won (US$183 million) on a consolidated basis in the July-September period, down 53 percent from 454.4 billion won a year earlier, the company said in a regulatory filing.

Operating income dropped 37.5 percent on-year to reach 314.5 billion won in the third quarter, with sales falling 7.2 percent on-year to 3.9 trillion won over the cited period.

Lotte Chemical's weak earnings were mainly due to its aromatics business, which makes products like paraxylene (PX) and polyethylene terephthalate (PET). Its aromatics business only made an operating profit of 5.4 billion won in the third quarter, a 94 percent decline from 96.8 billion won a year earlier.

"Oversupply by Chinese firms in the PX market worsened profitability in the business," Lotte Chemical said. "Our profitability in the PET business also worsened as product prices dropped, while buyers went into a wait-and-see mode."

Lotte Chemical said its olefin business posted an operating profit of 210.2 billion won in the third quarter, a 32 percent drop from a year earlier.

The company said its profitability in the fourth quarter is likely to face downward pressure due to regular maintenance of their production facilities and sluggish improvement in product margins following a supply increase in the market.

Lotte Chemical Q3 net more than halves on weak aromatics business - 1

kdon@yna.co.kr
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