LOTCHEM struggles with shrinking margins, profits dip 65% in 1Q2024

April 18, 2024 (MLN): Lotte Chemical Pakistan Limited's (PSX: LOTCHEM) earnings plummeted 64.7% YoY in the first quarter of 2024. The company’s profit after tax fell to Rs897.1 million compared to a profit of Rs2.54 billion in the same period last year (SPLY).

This translates to an earnings per share (EPS) of Rs0.59, a stark contrast to the Rs1.68 EPS, recorded in SPLY.

Along with the results, the company announced an interim cash dividend of Rs0.5 per share.

Despite a robust 46% YoY increase in revenue, reaching Rs32.28bn up from Rs22.11bn, the cost of sales surged by 73.1%, eroding gross profit by 62.1% to Rs1.68bn.

The gross margins worsened significantly to 5.22% as compared to 20.07% in SPLY.

During the period under review, other income marked a decline of 40.0% YoY to stand at Rs351.09m in 3QFY24 as compared to Rs585.16m in SPLY.

On the expense side, the company observed an increase in administrative Expenses by 20.3% YoY while reducing other expenses by 62.4% YoY to clock in at Rs182.35m and Rs111.95m respectively during the review period.

The company’s finance cost dipped by 70.5% YoY and stood at Rs222.78m as compared to Rs755.51m in SPLY.

On the tax front, the company paid a lower tax worth Rs572.18m against the Rs1.24bn paid in the corresponding period of last year, depicting a decrease of 53.9% YoY.

Amount in thousand except for EPS

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