South Korea’s Lotte Chemical Thursday announced its third-quarter consolidated operating profit fell 34.3 percent to 503.6 billion won ($449 million) due to sharp gains in raw material prices and oversupply.
Sales grew 6.5 percent to 4.24 trillion won and net profit fell 27.3 percent to 458.7 billion won in the same period.
The operating profit missed a consensus prediction of 576.9 billion won. The company blamed a recent surge in naphtha prices that move in tandem with crude oil fluctuations for the decline.
The petrochemical industry entered a downturn this year ending a three-year boom. The company faced triple whammies of supply glut, weak demand and high oil prices.
It cannot expect pickup in the coming year. Its bottom line will be weighed down by expansion plans in coming months and inventory stockpile.
The company’s subsidiary Lotte Chemical Titan will complete capacity expansion at polypropylene and cracking plants late this year. Ethane cracking and monoethylene glycol plants in the U.S. will be newly built next year.
By Kang Doo-soon and Minu Kim
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