KUALA LUMPUR, Jan 30 — Lotte Chemical Titan Holding Bhd's (LCT) net profit for the financial year ended December 31, 2018 (FY18) fell 26 per cent to RM788.25 million compared to RM1.14 billion registered the previous financial year.

However, revenue rose 18 per cent to RM9.24 billion from RM7.82 billion the preceding year.

In a filing with Bursa Malaysia today, LCT said the higher sales revenue was mainly driven by an increase in sales volume which was supported by improvements in production quantity during the year, but profit margin was squeezed, primarily due to much higher naphtha feedstock costs in tandem with global crude oil prices, relative to product prices for the year.

LCT proposed a 17 sen dividend per share, which translates to a total dividend payout of RM386 million.

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President and chief executive officer Lee Dong Woo said the petrochemical industry had experienced many uncertainties during the year with the highly volatile global crude oil market, coupled with the escalation of US-China trade conflicts in 2018.

“Despite these challenges, the company was able to ride through with record sales performance and generated net operating cash flows of RM873.5 million in the year. Hence, we seek to reward our shareholders for staying through with us during this difficult time,” he said.

Moving forward, LCT highlighted that the petrochemical industry remains challenging amid persisting market uncertainties, pending the outcomes of the global trade conflicts and volatile crude oil market which saw a bumpy ride throughout 2018.

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Nevertheless, global economic activities are expected to hold up, with higher Gross Domestic Product growth seen for emerging markets and the Asean region in the coming years, it said.

On the domestic front, the company said it foresees new additional capacities to create short-term supply imbalances.

Over the next five years, the advancement of the company’s growth plan will result in capacity expansion by more than 50 per cent, cementing its position as a top-tier petrochemical company in South-east Asia, it said.

“The petrochemical market is a long-term play and our company will be able to ride through short-term volatilities given our healthy operating fundamentals and strong technical support from Lotte Chemical Corp, our parent company.

“More so, our company is currently in a zero-gearing position with ample liquidity and our key expansion projects are moving on schedule,” Lee added. — Bernama