LOTTE Chemical Titan Holding Bhd recorded a net loss of RM170.06 mil in the first quarter ended March 31, 2020 from a net profit of RM55.83 mil, on the back of lower revenue of RM1.46 bil versus RM2.17 bil previously.
In a filing with Bursa Malaysia, it said the Covid-19 pandemic caused sluggish demand amid regional movement containment measures on top of the sudden plunge in global crude oil prices, which intensified volatility in its naphtha feedstock costs and weighed heavily on its average product selling prices (ASP).
It said the lockdown of major cities in China since January had disrupted critical global supply chains and caused severe impact to the global economy.
Operationally, it said the company had undergone turnaround activities since end-February for the majority of its plants in Malaysia which was successfully completed within schedule in early April and the plants involved have resumed normal operations.
Hence, the overall operating rate for its complex was lower in the quarter which led to lower production volume.
President/CEO Dr Lee Dong Woo said there are heightened global concerns on the severity of impact of the pandemic on the global economy.
“Our company would also be impacted as the petrochemical industry correlates with and is heavily dependent on the overall consumption patterns which drive the global economic growth.
“Nonetheless, we maintain strong financial resilience, being comfortably in a net cash position with RM4 bil of cash as well as generating about RM271 mil cash flows from operations in the quarter,” he said.
Moving forward, he said Lotte Chemical would continue to focus on operational and financial performance optimisation initiatives amid the extremely volatile external environment.
Despite the challenging business environment, it has joined nationwide efforts in combating the Covid-19 pandemic by supplying personal protective equipment and other key essential items to medical and security personnel through the relevant authorities.
Lotte Chemical has also sponsored its polypropylene, a type of polymer product, which is one of the raw materials used for the production of face shields and throat swabs for Covid-19 testing procedures.
“The product sponsorship is done in collaboration with government agencies and industry associations such as the Malaysian Technology Development Corporation, Malaysian Petrochemical Association and Malaysian Plastics Manufacturers Association,” it added. — April 29, 2020, Bernama