LOTCHEM: Robust uptick in income continues

April 22, 2021 (MLN): Lotte Chemical Pakistan Limited (LOTCHEM) has disclosed 1QCY21 results today, wherein the company posted earnings of Rs1.6bn (EPS: Rs1.1/sh), which was 28.2x higher than the profits of Rs57.9mn (EPS Re0.04) in 1QCY20.

The impressive growth in the company’s earnings attributed to a surge in PTA-PX margin and upbeat demand from the downstream PSF segment.

During the quarter, net sales went up by25% YoY to Rs14.7bn largely on the back of higher international PTA prices and production. As a result, the company witnessed gross profit margins of 15.4% compared with loss during 1QCY20. The rise in gross margins is witnessed due to a 44% YoY rise in PTA margins, 1.5% YoY PKR depreciation, GIDC suspension, and inventory gains.

On the expense side, Distribution and Administration cost inclined by 16% and 8.5% respectively. While other expenses surged by a whopping 38.3x YoY.

Among other line items, the Other income has declined by 19% YoY on the back of lower deposit rates.

Moreover, the company booked a finance income of Rs98mn due to exchange gain on the back of PKR appreciation during the quarter under review.

On the tax front, the company incurred an effective tax rate of 29% compared to 31% in 1QCY20.

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