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Tuesday, November 29, 2022

Lotte Chemical ‘expects improvement in Q4’

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“No plan” for additional support for Lotte E&C

View of the Lotte Chemical plant in Yeosu.

Lotte Chemical, which recorded an operating loss of more than 400 billion won on a consolidated basis in the third quarter of this year, announced on the 21st that its consolidated profit is likely to fall in the fourth quarter of this year. the foundation. There are many expectations in the securities industry that Lotte Chemical will post an operating loss of around 70 billion won on a consolidated basis in the fourth quarter of this year, so the focus is on fourth quarter results.

Lotte Chemical made the announcement in a conference call to discuss a KRW 1.105 trillion paid-in capital increase. This is due to the fact that Lotte Fine Chemical, a subsidiary, is expected to contribute to improved performance in the 4th quarter, and the naphtha delay effect (the effect of a temporary delay in the introduction of raw materials), which was the main reason for the sluggish results in 3- m quarter, stop.

Lotte Chemical also announced that it plans to invest a total of 4 trillion won in facilities next year, including the 2.7 trillion won acquisition of Iljin Materials. Regarding the acquisition of Iljin Materials, the company plans to raise 1 trillion won internally and borrow 1.7 trillion won externally. Kang Jong Won, CFO of Lotte Chemical, said, “We are currently discussing the loan with financial institutions.”

Lotte Chemical has no plans to invest more in Lotte E&C, which recently invested more than 500 billion won. Kim Yong Seop, Head of ESG Lotte Chemical’s Headquarters, said, “We believe that the risks of Lotte E&C have been reduced to a significant level.” Chief Financial Officer Kang Jong Won drew the line, “No extension planned” for a 500 billion won loan with a three-month maturity to Lotte E&C.

Reporter Lee Chang-hoon [email protected]

Source: Economist

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