Global Volatility Persists as Lotte Chemical Titan Reports
Lotte Chemical Titan Holding Bhd anticipates that the global business landscape will remain highly volatile in the foreseeable future, a challenging outlook driven by persistent geopolitical conflicts, including the ongoing Russia-Ukraine war and the unrest in the Middle East, compounded by the effects of US reciprocal tariffs.
Despite these substantial external headwinds, the group reported a narrowing of its net loss for the third quarter ended September 30, 2025 (3Q25).
The net loss decreased to RM197.86 million, a significant improvement from the much larger net loss of RM1.69 billion recorded in the same period of 3Q24.
This performance translated to a lower loss per share of 7.41 sen in 3Q25, down from 10.82 sen in 3Q24.
Furthermore, the group’s revenue demonstrated resilience, climbing by 26% year-on-year (y-o-y) to reach RM2.45 billion.
This revenue growth was primarily supported by an increased sales volume, a factor largely attributed to the initial contribution from the Lotte Chemical Indonesia New Ethylene (LINE) project.
Although the LINE project was still in its commissioning phase during the quarter, its early sales contribution provided a crucial boost to the group’s top line.
The key factors enabling the reduction in losses were mainly two-fold: a reduced share of losses stemming from the associate company, Lotte Chemical USA Corp, and lower depreciation expenses associated with the Malaysian operations.
These internal adjustments, combined with the new capacity from the LINE project, were instrumental in mitigating the financial impact of the adverse global petrochemical market conditions facing Lotte.
Improved Margins and Commissioning Drive Loss Reduction
For the nine months ended September 30, 2025 (9M25), Lotte Chemical Titan continued its trend of loss mitigation, with the net loss narrowing to RM970.37 million, a marked improvement from the RM1.82 billion net loss reported in 9M24.
The company attributed this significant reduction in accumulated losses primarily to two core factors.
Firstly, a substantial decrease in the share of losses from its associate company, Lotte Chemical USA Corp, provided a considerable financial relief.
Secondly, the group benefited from a notable margin improvement within its polymer segment, suggesting better cost management or favorable shifts in the polymer product market despite the broader challenges.
However, the total revenue for 9M25 was down by 5% year-on-year, settling at RM5.37 billion.
This decline was mainly a consequence of both a lower overall sales volume and a reduction in the average product selling price across the Malaysian operations.
This negative impact on the top line was only partially offset by the initial sales contribution generated by the commissioning phase of the highly anticipated LINE project.
Despite the positive influence of the LINE project, Lotte Chemical Titan’s overall operational efficiency remained constrained, with the average plant utilisation rate standing at 50% in 3Q25, a decrease from 58% recorded in the corresponding period of the previous year.
It is important to note that this utilisation rate calculation excludes the LINE project specifically because it has not yet achieved formal commercial operation status, indicating that the full benefit of the new capacity is yet to be realized by Lotte.
Challenging Outlook for Regional Petrochemical Sector
In its official filing with Bursa Malaysia, Lotte Chemical Titan provided a cautious outlook, stating that its operational results will continue to be influenced by a complex interplay of external and internal factors.
Key among these external variables are fluctuations in feedstock and naphtha prices, which are intrinsically linked to changes in crude oil costs.
Additionally, the delicate supply and demand balance for petrochemical products globally, alongside overall macroeconomic conditions—which are driven by global and regional economic shifts, consumption behaviors, and population growth—will all play a crucial role.
The group specifically cautioned that, regionally, the persistence of product oversupply and softness in downstream demand are expected to maintain significant pressure on average selling prices and profit margins.
This challenging regional environment highlights the difficulties faced by Lotte and its competitors in balancing supply with a fluctuating demand landscape.
Despite navigating these various geopolitical and market headwinds, Lotte Chemical Titan reaffirmed its commitment to its core markets in Malaysia, Indonesia, and the broader South-East Asia region, signaling its long-term strategic focus on this geographical area.
Barring any unforeseen or highly disruptive circumstances, the group projects that its operating rate for the full financial year 2025 is expected to be managed within a range of 45% to 50%.
This projected operating rate reflects the ongoing operational constraints and the challenging market realities that Lotte is currently facing across its Asian manufacturing footprint.
