LOTCHEM’s profitability nosedives by 78% YoY during 9MCY20

October 20, 2020 (MLN): Lotte Chemical Pakistan (LOTCHEM) has reported a massive decline of 78% YoY in profitability to Rs 1.037 billion (EPS: Rs 0.69) for the nine months ended September 30, 2020, against net profits of Rs 4.732 billion (EPS: Rs 3.13) of the corresponding period last year.

This considerable decrease in earnings is attributable to lower volumetric sales and a decline in international PTA prices.

According to the financial statement issued to PSX, the company earned gross profits of Rs 1.07 billion, showing a substantial decline of 84% YoY due to a decline in international PTA margins.

On the cost front, the administrative expenses and distribution & selling expenses jumped by 4.64% YoY and 8% YoY respectively while other expenses plunged by around 52% YoY.

On the other hand,  the other income of the company increased by 12% YoY to Rs 895 million owing to higher income from short term deposits. The positive highlight is the finance income of Rs 135 million earned in the said period against the finance cost of Rs 136 million during 9MCY19.

More notably, the tax expenses of the company plummeted by 78% YoY, providing the cushion to its earnings.        

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