MOSCOW (MRC) -- South Korea’s Lotte Chemical Corp. with bigger capacity through mergers and acquisitions posted 460.3 billion won (USD409.3 million) in Q2 2016 net profit led by solid chemical sales and improved ethylene spread, reported Pulse.
The company announced in a regulatory filing that its registered 460.3 billion won in net profit for the second quarter ended June. Its operating income jumped 8.5% to 693.9 billion won from the same period last year. It is a record-high quarterly operating income and also exceeds that of its major rival LG Chem Ltd., which posted 615.8 billion won, for the third time after 2015 second quarter and first quarter this year. The sales for the April-June period recorded 3.4 trillion won, up 8.3% on year.
Lotte Chemical recently has reorganized its business structure through mergers and acquisitions to concentrate on chemical business. The company’s average ethylene spread that is used as the barometer to forecast a chemical firm’s business outlook improved to USD723 per ton in June-quarter from USD640 per ton in the previous quarter. The ethylene spread refers to the price difference between ethylene and its raw material naphtha, and chemical producer’s profit goes up when price gap widens.
The company has the largest production capacity in the country with annual output capacity of 2.82 million tons including 720,000 tons from its Malaysian subsidiary Lotte Chemical Titan. The Malaysian subsidiary posted 152.5 billion won in operating income in the second quarter, up 52% from 100.2 billion won during the same period last year.
The sales by Lotte Advanced Materials Co. also boosted Lotte Chemical’s second-quarter performance by adding 88.6 billion won in operating income. Lotte Chemical earlier this year acquired a chemical division from Samsung SDI and changed the nameplate to Lotte Advanced Materials.
As MRC wrote previously, in early May 2016, Lotte Chemical Corp. finalized the takeover of Samsung Group’s chemical units.The company said that it paid for money to acquire Samsung SDI Chemical on Apr. 29 and completed the acquisition of Samsung Group’s chemical businesses in about six months after the announcement of "Big Deal" in October 2015. Samsung Fine Chemicals, which was completely taken over by Lotte in Feb., changed its name to Lotte Fine Chemical, while SDI Chemical, which completed the acquisition process on the 29th, changed its name to Lotte Advanced Materials through the general meeting of stockholders.
Established in 1976, Lotte Chemical has been solidifyng its position by localizing cutting-edge petrochemical technologies. Among the high-quality products produced by Lotte Chemical through its efficient processes are ethylene, HDPE, LDPE, LLDPE, PP, functional resin, EG, SM, PIA, PET, etc. Lotte Chemical’s products are being distributed to 152 countries around the world. With the acquisition of Pakistan’s PTA in 2009, Artenius in the UK in 2010 and Titan Chemical Corp., Lotte Chemical is now able to efficiently supply excellent products to an increasing number of countries. The company is further accelerating its efforts to strengthen its global competitiveness by establishing overseas branches in Hong Kong, Russia, and USA, along with the sales corporation in China for active sales activities both in domestic and abroad.
MRC