KUALA LUMPUR: Lotte Chemical Titan Holding Bhd’s net profit for the first quarter ended March 31, 2018, fell 28.8 per cent to RM244.27 million from a year earlier due to a margin squeeze, foreign exchange (forex) loss and a higher effective tax rate (ETR).
However, revenue increased to RM2.21 billion from RM1.91 billion previously on the back of a higher sales volume.
In a filing with Bursa Malaysia yesterday, the producer of olefins and polyolefins said it posted lower earnings owing to a drop in pre-tax profit and an increase in its ETR.
The group’s pre-tax profit fell by RM86.5 million due to a profit squeeze following higher feedstock prices from end-2017 while RM44.6 million in forex losses were incurred as a result of the revaluation of its US-dollar initial public offering funds against the ringgit held for an Indonesia project capital injection.
Furthermore, ETR rose to 18.5 per cent in the quarter under review compared with 11.3 per cent in the same period last year.
“The lower ETR in the first quarter of last year was attributed to the higher reinvestment allowance claimed in 2017,” it explained.
On prospects, Lotte Chemical Titan said it expected the petrochemical market to remain resilient in the near-term with demand growth for petrochemicals outpacing the rate of new supply additions in the region.
“Supply is expected to be tighter in view of the turn-around season in the Asia region and demand is expected to pick up in preparation for Ramadan and Hari Raya, especially in the domestic market, as well as, Indonesia and other Muslim countries such as Pakistan and Bangladesh,” it said.
According to Lotte Chemical Titan, its ability to maximise production outputs and operational efficiency, as well as, feedstock prices will be major influences on its results for this financial year.
“Barring any unforeseen circumstances, our board expects performance for the financial year ending Dec 31, 2018, to remain positive,” it added. — Bernama