LOTCHEM - LOTTE Chemical Pakistan Limited

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xResearch

Active Member
Apr 9, 2017
1,537
1
38
#2
LOTCHEM: Earning bounce back in CY16

Wednesday, 12 April 2017

By: WE Financial Services Limited

In our today's morning briefing we would discuss the performance of Lotte Chemical Pakistan Limited (LOTCHEM) in CY16.

Primarily on back of higher margins of Pure Terephthalic Acid (PTA), increased volumetric sales and decline in conversion costs, LOTCHEM managed to post a profit after taxation (PAT) of Rs 324 million (EPS: Rs 0.21) in CY16 as against a loss after taxation (LAT) of Rs 748 million (EPS: Rs 0.49) in CY15.

On QoQ basis also the performance of the company remained impressive as it posted a PAT of Rs 216 million (EPS: Rs 0.14) in 4QCY16 which is 83% up when compared to a PAT of Rs 118 million (EPS: Rs 0.08) in 3QCY16. This growth in earning was also made possible mainly due to 7% QoQ rise in primary margin to $103/ton.

As a result of increased sales volume, the net revenue of the company managed to grow by 3% YoY in CY16 to Rs 34,785 million as against Rs 33,863 million in CY15. Owing to the imposition of anti-dumping duty on Polyester Staple Fiber, the demand moved up as a result of which the volumetric sales of the company totaled 492k tons during the year under review registering 6% YoY surge when compared to 463k tons of sales in CY15. The cost of sales remained flat about Rs 34,080 million in CY16 versus Rs 34,120 million in CY15. The cost remained in control owing to availability of cheaper inventory and lower prices of Paraxylene (PX). Consequently, gross profit of the company totaled Rs 705 million in CY16 as against a gross loss of Rs 257 million in CY15
 

xResearch

Active Member
Apr 9, 2017
1,537
1
38
#3
AHL Research
24 August 2017


Lotte Chemical Pakistan Limited
Result Review: 1HCY17 Earnings of PKR 0.23/sh


LOTCHEM announced its 2QFY17 earnings of PKR 0.03/share

Lotte Chemical Pakistan Ltd (LOTCHEM) announced its 1HCY17 financial results today whereby the company posted a profit after tax of PKR 354mn (EPS: PKR 0.23) compared to loss of PKR 10mn (LPS: PKR 0.01) during 1HCY16. In 2QCY17, earnings declined by 76% YoY to PKR 0.03/share.

Result Highlights
  • The company recorded net sales of PKR 19,647mn during 1HCY17, up 14% YoY. The YoY rise is attributed to higher PTA prices (up by 9% YoY).
  • Gross margins have increased by 280bps YoY to 3.4% in 1HCY17 due to higher PTA margins, up by 5% YoY to USD 105/ton compared to USD 100/ton in 1HCY16.
  • Sequentially, gross margins has settled at 2.1%, showing an attrition of 247bps QoQ attributable to lower PTA-PX margins on the back of expensive inventory of Paraxylene (PX) available at the end of 1Q.
 

xResearch

Active Member
Apr 9, 2017
1,537
1
38
#4
AHL Research
24 August 2017


Lotte Chemical Pakistan Limited
Result Review: 1HCY17 Earnings of PKR 0.23/share

LOTCHEM announced its 2QFY17 earnings of PKR 0.03/share

Lotte Chemical Pakistan Ltd (LOTCHEM) announced its 1HCY17 financial results today whereby the company posted a profit after tax of PKR 354mn (EPS: PKR 0.23) compared to loss of PKR 10mn (LPS: PKR 0.01) during 1HCY16. In 2QCY17, earnings declined by 76% YoY to PKR 0.03/share.

Result Highlights
  • The company recorded net sales of PKR 19,647mn during 1HCY17, up 14% YoY. The YoY rise is attributed to higher PTA prices (up by 9% YoY).
  • Gross margins have increased by 280bps YoY to 3.4% in 1HCY17 due to higher PTA margins, up by 5% YoY to USD 105/ton compared to USD 100/ton in 1HCY16.
  • Sequentially, gross margins has settled at 2.1%, showing an attrition of 247bps QoQ attributable to lower PTA-PX margins on the back of expensive inventory of Paraxylene (PX) available at the end of 1Q.
 

xResearch

Active Member
Apr 9, 2017
1,537
1
38
#5
AHL Research
24 October 2017

LOTCHEM announced its 3QCY17 earnings of PKR 0.03/share

Lotte Chemical Pakistan Ltd (LOTCHEM) announced its 9MCY17 financial results today whereby the company posted a profit after tax of PKR 405mn (EPS: PKR 0.27) compared to profit of PKR 108mn (EPS: PKR 0.07) during 9MCY16. In 3QCY17, earnings declined by 57% YoY to PKR 0.03/share.

Result Highlights
  • The company recorded net sales of PKR 28,413mn during 9MCY17, up 8% YoY. The YoY rise is attributed to higher PTA prices (up by 6% YoY).
  • Gross margins have increased by 173bps YoY to 3.1% in 9MCY17 due to higher PTA margins, up by 13% YoY to USD 114/ton compared to USD 101/ton in same period last year.
  • In 3QCY17, sales went down by 4% YoY to PKR 8,466mn despite 7% YoY higher PTA prices. Low volumetric sales is the major reason behind this decline, we view.
  • During 3QCY17, gross margins have settled at 2.3%, showing a decline of of 51bps YoY attributable to lower PTA-PX margins.
  • After this announcement, we revise down our CY17 earnings expectations to PKR 0.46/share.

Recommendation
  • We flag “BUY” call on the stock with Jun-18 ending target price of 10.19/share, providing an attractive upside of 41%.